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Commons Chamber

Volume 184: debated on Monday 25 May 1925

House of Commons

Monday, May 25, 1925

The House met at a Quarter before Three of the Clock, Mr. SPEAKER in the Chair.

Private Business

Burgess Hill Water Bill,

Oxford Corporation Bill,

Lords Amendments considered, and agreed to.

Darlington Corporation (Transport, etc.) Bill,

Fylde Water Board Bill,

Kingston-upon-Hull Corporation Bill [ Lords ],

London County Council (Tramways and Improvements) Bill,

Manchester Ship Canal Bill,

As amended, considered; to be read the Third time.

St. Mildred's Churchyard Bill [ Lords ],

Standard Life Assurance Company Bill [ Lords ],

Read a Second time, and committed.

Newport Corporation Bill (by Order),

Consideration, as amended, deferred till Wednesday.

North Metropolitan Electric Power Supply Company Bill [ Lords ] (by Order),

Consideration, as amended, deferred till To morrow.

London and North Eastern Railway (General Powers) Bill [ Lords ] (by Order),

London County Council (Money) Bill (by Order),

Second Reading deferred till Thursday.

London, Midland and Scottish Railway Bill [ Lords ] (by Order),

London, Midland and Scottish Railway (New Capital) Bill [ Lords ] (by Order),

Second Reading deferred till Tuesday, 9th June.

West Hartlepool Corporation (Trolley Vehicles) Provisional Order Bill,

Read a Second time, and committed.

PIER AND HARBOUR PROVISIONAL ORDERS (No. 2) BILL,

"to confirm certain Provisional Orders made by the Minister of Transport under the Genera] Pier and Harbour Act, 1861, relating to Clacton-on-Sea, Hove and Weymouth," presented by Colonel ASHLEY; read the first time; and referred to the Examiners of Petitions for Private Bills, and to be printed. [Bill 185.]

Oral Answers to Questions

India

Postmen and Runners (Casualties)

asked the Under-Secretary of State for India the number of postmen and runners killed and injured while on duty for the last 10 years: and what was the amount of compensation paid to them or their families?

Daring the 10 years ending with March, 1924, 35 runners and four village postmen were killed, and 16 runners and six village postmen injured while on duty. I have no later information, nor do I know what compensation was paid in any of the cases referred to.

Yes, if the hon. Member presses me; but this is a matter that is really dealt with by the Legislative Bodies in India. I think it is a question whether it is fair to ask Departments in India to give information to this House, and to the local Legislative Assemblies as well.

Imperial Capital Works, Delhi (Workmen's Compensation)

asked the Under-Secretary of State for India the number of workmen that have been injured, fatally or otherwise, in the stone yard of the Imperial Capital Works at Delhi, and the amount of compensation paid?

I have no direct information, but I will send the hon. Member a copy of an answer recently given in the Legislative Assembly on the subject.

Srijut Premanatha Dutta (Arrest)

asked the Under-Secretary of State for India the grounds for the arrest of Srijut Premanatha Dutta under the Bengal criminal law after he had been acquitted for complicity in the Chittagong murder case?

He was arrested and dealt with under the Ordinance in consequence of actions falling within Section 12 of the Ordinance, and committed on dates previous to the date of the murder. The case was examined by two Judges, as required by the Ordinance, and they reported to the local Government that, in their opinion, there was lawful and sufficient cause for the order made under Section 12 of the Ordinance.

Subordinate Civilian Officers (Pay)

asked the Under-Secretary of State for India whether he is aware that subordinate civilian officers employed under the Indian Government in the Royal Indian Marine and in His Majesty's dockyard at Bombay are in some anxiety as to whether or no they will receive any concessions or increases under the recommendation of the Lee Commission: whether if it is proposed that an all-round increase is to take place in the pay of these men; what arrangements have been made as regards their return to England on leave; and whether there is any discrimination to be made between the concessions granted to married as compared with unmarried men, respectively?

The Lee Commission was concerned solely with the superior Civil Services in India, and made no recommendations in respect of subordinate civilian officers. As regards the second part of the question, I am, not aware that any such all-round increase of pay is contemplated; and the last part of the question, therefore, does not arise. As regards the third part, the Government of India are considering whether any passage concessions on the lines of those recently granted to the superior Civil Services should be extended to subordinate civilian officers of the class in question.

Grain Elevators

asked the Under-Secretary of State for India whether, seeing that the Royal Commission on Food Prices reports that the erection of elevators in India would save wheat from being destroyed, and that if better care were taken of Indian wheat it would be of great assistance in keeping down the world price what steps are being taken by the Government of India to assist in the erection of elevators in that country?

Schemes for the erection of elevators in India have been considered by the Government of India on several occasions in the past. In 1919,. they reported that, owing to the comparative cheapness of labour in India, the excellent loading facilities at Karachi and the low cost of bags, no general scheme had previously been found necessary, though one elevator had been constructed at Lyallpur. At that time they were inclined to think that, owing to changed conditions, the introduction of a general system of elevators might be desirable, and further inquiries were set on foot, but were stopped, because it was found necessary to prohibit the export of wheat owing to short harvests. My Noble Friend does not know whether the Government of India have since again taken up the question, but will inquire.

Railway Development

asked the Under-Secretary of State for India what was the rate of development of the railways in India in the years between 1880 and 1925, as compared with the same period of years prior to 1880?

The mileage of railway opened in India from 1881 to 1925, inclusive, was 29,052, an average of 645 miles a year, and from 1853 to 1880, inclusive, 9,166, an average of 32V miles a year. There was no railway in India before 1853.

Singapore Base

asked the Under-Secretary of State for India whether the Government of India, was consulted by His Majesty's Government with regard to the construction and maintenance of the Singapore base; whether a reply was received from the Government of India; and whether he will ask the Government of India to give the Legislative Council an opportunity of expressing its views on this subject?

The reply to the first two parts of the question is in the affirmative. In regard to the third part, I have nothing to add to my replies to the hon. Member's supplementary questions on 18th May.

Does not the Noble Lord think it would be advisable to get the opinion of the Legislative Council?

As I said in reply to the hon. Member before, this question whether or not it is desirable there should be a Debate in the Legislative Assembly rests primarily, as far as Government business is concerned, with the Government of India. The question whether or not a Debate should take place on a private Members' day, seems to me to lie solely with the President of the Assembly to decide whether it is in order or not.

Would not the Noble Lord ask the Secretary of State for India to consult with the Government of India as to the advisability of getting the opinion of the Indian people themselves?

I cannot interfere with the discretion of the Government of India, or with the President of the Assembly, whose position in the Assembly corresponds with that of the Speaker in this House.

Is the Noble Lord not aware it is a fact that you do adopt the procedure I suggest with regard to other Dominions, and why not with regard to India?

No, we do not do anything of the sort. It is entirely a matter for the Governments of the Dominions whether or not there is a Debate, just as in this case I assert it is wholly a matter for the Government of India whether there should be a discussion or not.

May I ask whether the Noble Lord will resist attempts on the other side of the House to curb the independence of the Legislative Assemblies?

I certainly think that these matters are best left to the Legislative Assemblies in India itself.

Geneva Protocol

asked the Undersecretary of State for India whether the Government of India was consulted about the Geneva protocol by His Majesty's Government; whether a reply was received from the Government; and whether he will ask the Government of India to lay the protocol before the Legislative Assembly in order that the opinion of the elected representatives of the Indian people on this subject may be expressed?

The answer to the first two parts of the question is in the affirmative. As regards the last part, my Noble Friend sees no reason for taking any action.

Seeing that the Noble Lord has just told us he wants to preserve the independence of the Legislative Assemblies and the people of India, could he give the people of India, through the Legislative Assemblies, an opportunity of passing their view on this matter?

The hon. Member's friends in the Legislative Assembly have every right to ask a question on the matter, if they wish to do so.

Monetary Reserve

asked the Undersecretary of State for India whether it is necessary, in addition to the £13,000,000 or £14,000,000 balance of Indian moneys in the hands of the Secretary of State, to retain the present sum of about £60,000,000 of Indian moneys in this country for the gold standard and paper currency reserves; and if he will consider whether these reserves could now be kept in the Imperial Bank of India?

The balance and reserves mentioned are held for different purposes. Apart from the working balance, these funds are invested in securities, and do not represent moneys on deposit. I see no reason for any change in the present arrangements for the custody of the securities concerned. The issues of financial policy raised in the question will, doubtless, come under review by the Currency Committee, which it is intended to appoint when the conditions set forth in my replies of 29th April and 18th May to my hon. Friend the Member for Ilford (Sir F. Wise) are fulfilled.

Muddiman Committee (Recommendations)

asked the Undersecretary of State for India whether the consultations with Lord Reading have resulted in any conclusion on the question of the provincial contributions; and when he expects to be in a position to state his decisions on the questions of Cabinet responsibility and the extension of the franchise recommended in both of the Muddiman Committee's Reports?

As I have already informed the House, my Noble Friend hopes to make a full statement in the course of the next few weeks, and I cannot anticipate what he will say on that occasion.

Cotton Growing, South Africa

asked the Secretary of State for the Colonies whether, in view of the fact that, owing to the increasing cost of labour and the operations of the boll-weevil and other insects, the United States of America will be unable in the future to export more than 4,000,000 bales of cotton, his Department is considering the desirability of assisting white emigrants to settle in the cotton-growing districts of South Africa where cotton production is limited mainly by a deficiency of white labour?

While I cannot commit myself to any figure for the probable future exports of cotton from the United States of America, I can assure my hon. Friend that the importance of the development of cotton-growing in South Africa is recognised both by His Majesty's Government and by the Governments of the Union of South Africa and Southern Rhodesia. I understand that the Empire Cotton Growing Corporation, which has been working in close co-operation with the Governments of the Union and Southern Rhodesia, regards the development which is taking place in those countries, as most satisfactory. I may add that the question of developing this industry in Swaziland, where it seems likely that conditions may be favourable for cotton, is engaging my attention.

Irish Free State (British Claim)

asked the Secretary of State for the Colonies if he is now in a position to make any statement as to the claim of the British Government under Article 5 of the Irish Treaty?

No, Sir. I am not in a position to add anything to the replies which were given to the hon. Member on 30th April; to the hon. and gallant Member for Central Hull (Lieut. Commander Kenworthy) on the 4th instant, and to the hon. and gallant Member for North Lanark (Sir A. Sprot) on the 5th instant.

Can my hon. Friend say what is the reason for the great delay in securing this payment to which the Free State agreed under the treaty so long ago?

As I pointed out in previous answers, this probably would be a matter of long negotiation. The Treasury only formulated the heads of claims at the time the Budget was introduced in this House. Then there are certain set-offs which have to be considered, and I anticipate it will take several weeks before we can get to any figures or any final result.

Why were not these heads of claims formulated many months, if not years, ago?

As I said in my previous answer, we have done so as quickly as possible, but until the Boundary Commission was established and financial questions explored, it was not possible for the Treasury to put forward our claims.

Malaya (Royal Naval Volunteer Reserve)

asked the Secretary of State for the Colonies whether it is proposed to form a Royal Naval Volunteer Reserve at Singapore, and later on units at other ports in the Straits and Federated Malay States; and whether he will give some details of the project and state whether this scheme is to be extended to other Colonies?

Yes, Sir, the formation of a Royal Naval Volunteer Reserve at Singapore and at other places in Malaya is under consideration, but no details of the scheme are at present available. The possibility of similar schemes being adopted in other Colonies is also receiving consideration.

Is the cost of this scheme included in the Estimate that has been given for Singapore?

No; I think the question of the cost of the Royal Naval Volunteer Reserve will be on the same lines as the local volunteer force in the Colonies. It will, therefore, fall on the Colonial Revenues.

Crown Colonies and Protectorates

Railway Material Orders

asked the Secretary of State for the Colonies whether he will consider, in view of the depression in the iron and steel and heavy engineering industries, the possibility of placing, in advance of immediate requirements, large orders for the railway material likely to be required during the next few years in the Crown Colonies and Protectorates?

The reasons given by my hon. Friend will naturally have their weight in the expediting of programmes of railway development. The actual ordering of material in advance of requirements is, however, not practicable. The requirements themselves are too uncertain as to time and design for the Crown Agents to order supplies in anticipation of indents from the Governments concerned, while the latter could not well be asked to bear the loss of interest, cost of double handling and storage, and risk of changes in local conditions which might render the particular supplies ordered unnecessary.

Is not the gauge of the railways in East Africa already fixed, as well as the weight of the rails per foot ton also known? Under these circumstances is it not possible for orders for steel rails in advance of requirements to be placed?

The rails vary considerably in width, according to the country you are going through and the traffic the railway is likely to carry. There is a certain amount of construction going on, and orders will be placed. Until you know the money you are going to get for the railways, and where they are going, it is quite impossible to anticipate far in advance orders such as the hon. Member suggests.

Kenya

Indian Colonisation

asked the Secretary of State for the Colonies whether the Government contemplates the offer of an area of land in the lowlands of Kenya as a reserve for Indian colonisation?

In accordance with the decision published on page 17 of the White Paper of July, 1923, areas have been reserved in the lowlands of Kenya with a view to ascertaining what demand there is for agricultural land on the part of Indians. The matter awaits an examination of the land by representatives of local Indian interests, of the Government of India, or of both.

Could the hon. Gentleman say whether the Government of India have taken any action in the matter?

Railway Construction (Native Labour)

asked the Secretary of State for the Colonies if he will state the methods in force for the conscription of native labour for railway construction in Kenya; the tribes from which such conscripted labour is at present drawn; the period for which it is conscripted; and the monthly wage paid?

asked the Secretary of State for the Colonies if native laburers who refuse to obey an order to work on railway construction work in Kenya, under the ordinance of 1922, may be punished with two months' rigorous imprisonment?

asked the Secretary of State for the Colonies what is the rate of wages being paid to the natives of Kenya who are being conscripted for railway construction work there?

asked the Secretary of State for the Colonies how many natives in Kenya have been compulsorily recruited for railway or other Government work, the length of their service, and the amount of wages they are being paid?

With the permission of the hon. Members, I will, as the answer is a long one, circulate it in the OFFICIAL REPORT.

Then I will read the answer.

The power of calling up labour for Government purposes is conferred on native headmen under the Native Authority Ordinance, 1912, as amended in 1922, in accordance with the decision of the then Secretary of State contained in the despatch published in 1921 as Cmd. 1509. In the selection of labourers efforts are made to choose those able-bodied males who have neither undertaken work for wages outside the reserves, nor have shown willingness to produce economic products for export from the land in the reserves. The returns for March showed that 1,561 have been so recruited for the completion of the Uasin-Gishu Railway. An earlier telegram showed that for this line 1,200 Kavirondo and 300 from the Kerio province had been called out. For the Thika-Nyeri line the Acting Governor proposed to call out 500 Akamba natives, as these show a far lower percentage of workers than the local Kikuyu. He also proposed to call out 200 Akamba for relaying the main lane, but the March return showed only 59 compelled men working on the Thika-Nyeri line, and no others except on the Uasin-Gishu line.

I would remind hon. Members that I am answering four questions. The period of enlistment is limited by the ordinance to 60 days in any one year, and it appears that for the Uasin-Gishu line the bulk of the labour will be required for only two months, in order to hasten the completion of this all-important connection.

The rate of pay for compulsory labour was originally fixed at 14s. a month, with the special railway scale of rations in addition, this rate being 2s. a month less than the current rate for experienced voluntary labour. Since then the labour market has become somewhat easier and the rate for voluntary unskilled labour has fluctuated between 16s. and 12s. a month plus rations.

In the Ordinance the penalty for disobeying any lawful order given by a headman is on conviction a fine of 150s., or, in default of payment, two months' imprisonment.

Papers containing the correspondence regarding and the reasons for the use of compulsory labour for these particular public works will be laid before Parliament at an early date.

Is there any system at present at work for checking an extension of this rather undesirable system of the conscription of labour, as there was previously?

The Ordinance was operative during the Labour Government's period of office. In each case, as laid down in Mr. Churchill's dispatch, which I have quoted, the use of compelled labour on public works throughout Africa —this applies not only to Kenya but other territories—requires the special sanction of the Secretary of State, and recourse to it is only had in matters of urgency and the public interest.

Will the hon. Gentleman answer my question—whether or not there is now in existence an independent body, as there was formerly, checking any extension of the conscription of labour?

I am not aware of an independent body. There was a Labour Commissioner, under a special Labour Department for Native Affairs, and proposals were only made on the recommendation of the Executive Council.

Did we understand the hon. Gentleman to say that the wages were 14s. a month, and that the fine for refusing to obey an order was 150s.?

Has the hon. Gentleman advised increasing the wages, in view of the fact that a certain number of volunteers are turning out to work?

Yes, the figures which I have read out are a large increase on the rates recently published. They are very much higher than the rates of wages paid in many parts of East Africa. In Nyasaland they are from 4s. 6d. to 6s. per month.

In consequence of the unsatisfactory nature of the reply, I beg to give notice that I will raise this matter on the Adjournment, at the first convenient opportunity.

East Africa Committee

asked the Secretary of State for the Colonies when the East Africa Committee, set up by the late Government under Lord South-borough, will resume its sittings; and whether the Report of the East Africa Commission, presented by members drawn from that Committee, will be submitted to the East Africa Committee for its consideration and report?

My right hon. Friend has nearly completed his study of the Report referred to and hopes to be able to give my hon. Friend a definite answer to his question if he will be good enough to repeat it this day week.

West Africa (Palm Oil and Kernel Industry)

asked the Secretary of State for the Colonies whether the Government has considered the Report on the position of the palm oil and palm kernel industry of West Africa; whether it is proposed to take any action upon the recommendations of this Report in the direction of attempting to transfer the extraction and refining of palm oil from this country to West Africa: and whether, before any such steps are taken, opportunity will be given for discussing the subject?

This is a matter which I cannot consider before I have received a full statement of the views of the Governors of the Dependencies concerned. At present I can add nothing to my reply to the question of my hon. Friend the Member for Ilford on the 4th of this month.

Colonies (Plantation Work)

asked the Secretary of State for the Colonies whether he is aware of the growing disinclination of younger men to take up plantation work in many of the overseas Colonies owing to the insecurity of their position when they attain experience and should benefit by progressive salaries which the companies save by dismissing them: and whether he will inquire into the effect this has in discouraging emigration to the Crown Colonies?

I am not aware of the circumstances mentioned by my hon. Friend; but if he will give me any specific instances which have come to his knowledge I will consider whether I can usefully take any action.

Is the hon. Gentleman making inquiries into the methods of the rubber industry?

Do I understand that my hon. Friend desires inquiry into the rubber industry in Malaya specially?

Slave Raids

asked the Secretary of State for the Colonies, whether he is aware that slave raids and trading still exist, and that raids have been made recently in the Sudan and Kenya Colony; and is he prepared to publish for the use of the Members of the House any information on this subject that is likely to be of use to them?

I have no evidence of slave raids into Kenya. As regards the Sudan, I understand that there have been no recent raids. The question of publishing papers relating to any raids from a foreign territory would be for the consideration of my right. hon Friend the Foreign Secretary.

We have been making inquiries for some time past, but can get no evidence of such raids as are suggested in the question.

East Africa (Transport Development)

asked the Secretary of State for the Colonies whether His Majesty's Government has under consideration the proposal to proposal to provide £10,000,000 for transport development in East Africa; and whether he is prepared to make it a condition of the loan that its advance shall not involve a demand for the conscription of native forced labour?

I would refer the hon. Member to the reply given to the question of my hon. Friend the Member for Reading (Mr. H. G. Williams) on 11th May. The conditions of any guaranteed loan would be settled by Parliament.

British Empire Exhibition

Executive Staff

asked the Parliamentary Secretary to the Overseas Trade Department the number of persons employed on the executive staff of the British Empire Exhibition, and the total amount of their salares?

I am informed by the British Empire Exhibition authorities that the administrative staff in receipt of monthly salaries number 67. There are also clerks, typists, etc., totalling 290. I have not yet received from the British Empire Exhibition authorities the figure showing the total cost involved.

Number of Visitors

asked the Parliamentary Secretary to the Overseas Trade Department the approximate number of visitors to Wembley up to date, and inform the House how that number compares with the corresponding date in 1924?

I am informed by the British Empire Exhibition authorities that the total admissions to the Exhibition up to and inclusive of the 22nd May (12 days) was 679,602. For the first 12 days of the 1924 Exhibition the number was 510,905.

May I ask the hon. Gentleman whether this large increase of visitors is not largely due to the repeated visits made by their Majesties?

Yes, Sir; undoubtedly the gracious presence of their Majesties the King and Queen has done a great deal to help.

Paris Exhibition (British Pavilion)

asked the Parliamentary Secretary to the Overseas Trade Department whether the British Pavilion at the Paris Exhibition has been opened; and what variety of exhibits is being shown?

The British Pavilion at the Paris Exhibition was opened to the public on Wednesday, 20th May, after an official luncheon given, in the British Restaurant, by His Royal Highness Prince Arthur of Connaught, the President of the General Council of the British Section. The Pavilion includes a series of furnished rooms, together with an Ecclesiastical Court, and contains exhibits of textiles, books, metal-work, pottery, sculpture, etc., executed by the leading craftsmen and industrialists in the United Kingdom. Further exhibits, covering a wide range of pro- duction, and including education and the art of the theatre, are being displayed in the space allotted to Great Britain in the Grand Palais and the Esplanade des Invalides.

May I ask the hon. Gentleman, who is well known both as an art critic and writer, whether he is satisfied that this exhibit of ours is second to none?

If I am asked my private opinion, I thought that the decorative things in the British Pavilion were lovely. The outstanding articles there were the hand-wrought silver, the beautiful pottery, and the articles in enamel on gold, made by our craftsmen. I considered the hand-wrought silver was as good as anything done in the time of Charles II and Queen Anne, and the enamel on gold equal to the jewellery of the Cinquecento period. I hope that our shopkeepers in Regent Street and Bond Street will see the craftsmen who made these things, and on their return from Paris buy goods from them for everyday trade, for they will certainly enhance the reputation of British decorative art.

Will the hon. Gentleman state whether the British Pavilion was in a full state of completion on 20th May, when the exhibition opened?

Yes, Sir; and the thanks of my Department are due to Colonel Cole and to all his staff from the Department of Overseas Trade. They worked all night; everything was ship-shape and in order, and ready for the opening of our pavilion.

New Zealand Exhibition

asked the Parliamentary Secretary to the Overseas Trade Department whether he can give the House any particulars with regard to the National Exhibition in New Zealand and what part this country is taking therein?

His Majesty's Government have accepted an invitation from the Government of New Zealand to participate in an exhibition of the world's arts, products and manufactures, entitled "The New Zealand and South Seas International Exhibition," which will be held in Dunedin from November to April next. A building covering an area of 56,000 square feet has been set aside by the exhibition authorities for British, exhibits. One half of this area will be occupied by commercial exhibitors whose participation is being organised directly by the exhibition authorities in conjunction with the Federation of British Industries, and the other half by the Government exhibit which is being organised by my Department. It is also hoped to arrange for a British Section in the Art Gallery.

Agriculture

Colonial Produce (Marketing Grant)

asked the Minister of Agriculture if, in the allocation of any grant to assist the marketing of Colonial produce in this country, due regard will be had to the effect of such a subsidy on the difficulty of marketing home produce; and if any equivalent assistance is contemplated to home producres and distributors?

I have been asked to reply. As has already been stated, in considering any recommendations that may be made by the Imperial Economic Committee with regard to the marketing of Empire produce, the Government will give careful consideration to their hearing on the distribution of home produce. With regard to the last part of the question, I would refer the hon. Member to the reply given by the Chancellor of the Exchequer to my hon. Friend the Member for Devizes (Mr. Hurd), on 12th March last, a copy of which I am sending to him.

also asked the Prime Minister if any progress has been made in the matter of the proposed grant of £1,000,000 to assist the marketing of Colonial produce in this country; and if, and when, the allocation of the grant will come before the House for approval?

I cannot add anything to the answer which I gave to my hon. and gallant Friend the Member for Faversham on the 17th March. The preparation of a full scheme will not be undertaken until a Report has been received from the Imperial Economic Committee. Until such a scheme has been prepared no estimate will be presented to this House.

Charity Land, Porthcawl

asked the Minister of Agriculture whether he is aware that the application which he has received from the Porthcawl Rural District Council for permission to exchange the charity land of the labouring poor has already been refused by the Charity Commissioners on the ground that the allotments were of considerably greater value than the land proposed to be taken in exchange; and whether, before agreeing to the application, he will make full investigation into all the circumstances connected with this proposal?

The answer to the first part of the question is in the affirmative. As regards the second part, the hon. Member may rest assured that my right hon. Friend will fully investigate all relevant circumstances before giving his decision.

Land Deainagk

asked the Minister of Agriculture what steps, if any, he is now taking, or intends to take, to increase the area of cultivable land by compelling landowners and drainage authorities to initiate schemes for draining land that is now laid derelict?

The action suggested by the hon. Member could not be taken without fresh legislation of a contentious kind, which it is not possible to contemplate in view of the more urgent matters which require consideration by Parliament during the present Session. At the same time, the whole question of land drainage is receiving the careful consideration of the Government in conjunction with other questions affecting its agricultural policy, but my right hon. Friend is not yet in a position to make any statement on the subject.

In view of the absolute necessity for finding more work for British workpeople on British land, will the hon. Gentleman ask his right hon. Friend to secure the passing of such legislation as will make these schemes possible?

Can the hon. Gentleman tell us what percentage of the machinery has been foreign machinery?

also asked the Minister of Agriculture how much of the land which has been improved by drainage schemes belongs to the State; and if it is the intention of the Government to extend this work during the coming autumn?

My right hon. Friend regrets that it is not possible to state, without examining a, large number of papers, what area of land belonging to the State may have been involved in the drainage schemes carried out during the past four winters, but the area is in any case very small. As regards the latter part of the question, the matter is now under the consideration of the Government.

Are we to understand that the Government are continuing to improve privately-owned land and do not know the area of the land they are improving? What advantage does the country gain from these large grants which are given to help to drain privately-owned land?

The hon. Gentleman could not be expected to answer that question without notice.

Beet-Sugar Factories (Foreign Machinery)

asked the Minister of Agriculture the terms of the contract entered into by the late Government for the importation of foreign machinery for the raw beet-sugar factories; and in what respect this has been modified, if at all, by the present Government?

When the negotiations with the late Government took place, the two manufacturing groups then existing each promised three new beet-sugar factories for the production of white sugar, and the necessary arrange- merits were made for implementing these promises. When the 75 per cent. condition as to British plant and machinery installed in the factories was proposed by the present Government, my right hon. Friend found that commitments for machinery and capital had already been made in regard to three of these six factories, and he decided that it would be a breach of faith to impose any new conditions on the manufacturers building these factories, who were willing to continue building further beet-sugar factories in this country and in such cases would employ 75 per cent. of British machinery in accordance with the new condition.

Southern Railway Facilities

asked the Minister of Agriculture whether his attention has been drawn to the financial loss and injury inflicted on the fruit and vegetable growers through the decreased facilities of conveyance, especially on the Brighton section of the Southern Railway; and what action does he propose to take to increase the facilities for the conveyance of agricultural produce, especially in view of the forthcoming fruit season?

My right hon. Friend is not aware of any recent complaints of the nature indicated, but if the hon. and gallant Member will furnish details, my right hon. Friend will confer with the Minister of Transport on the subject.

Hudson Memorial, Hyde Park

asked the Undersecretary of State for the Home Department, as representing the First Commissioner of Works, who was responsible for the selection of the stone panel recently erected in Hyde Park to the memory of the late W. H. Hudson?

A sketch design was submitted by the Hudson Memorial Committee and was accepted by the First Commissioner of the day after consultation with a Committee of Experts dealing with such questions at that time.

Is the First Commissioner the ultimate and absolute authority for sanctioning the erection of monuments in the Royal parks?

Will the Under-secretary make the "Daily Mail" the absolute arbiter in these matters?

Is the Undersecretary aware that a large number of people regard this panel as particularly distinctive and appropriate for the Hudson Memorial?

May I ask my hon. Friend if he will convey to the First Commissioner of Works the expediency of excluding, as far as possible, all these erections which are apt to provoke acrimonious discussions, and confine the parks to trees and gardens?

Is the hon. Gentleman aware that it has been suggested that the sculptor in this case, owing to inadequate knowledge of the English language, thought he had to produce a sculpture dealing with birds, and has erected a scarecrow?

May I inquire whether the Under-Secretary would ask the First Commissioner if he will give at least six months to a section of the public, in order that they may learn to appreciate the merits of this work of art. I wish further to ask whether in point of fact there has ever been any work of art of merit that has not led to a storm of abuse?

Can the Undersecretary inform the House whether it is not a fact that this panel shows a deformed female figure, with elephantiasis of the hand?

On a point of Order. May I point out that this has appeared in the public Press?

Mexico

asked the Secretary of State for Foreign Affairs what is the position with regard to the recognition or otherwise by His Majesty's Government of the Government of Mexico?

I would refer the hon and gallant Gentleman to my reply to a question by the hon. Member for the Central Division of Southwark, on the 8th ultimo.

Has there been any change in the position at all, and are we examining the question of the relations between this country and Mexico? Is the matter being examined with a view to a settlement?

The matter is within my cognisance, but I have no steps to announce.

Autumn Session

asked the Prime Minister whether any decision has been come to with respect to an Autumn Sitting?

Until I see more clearly what progress is made with the business which it is necessary for this House to pass before the Adjournment, I regret that I shall not be in a position to make any statement.

In dealing with this matter may I ask whether the right hon. Gentleman is giving consideration to the desire which finds support in all parts of the House that the Session should normally commence in the autumn in order that it may be brought to a conclusion at a reasonable time next summer?

Franchise Conference

asked the Prime Minister whether he can make a statement as to the promised conference on the franchise?

I can add nothing to the answer which I gave on the 28th April in reply to a question by the hon. Member for Cardigan.

Is the right hon. Gentleman aware that the Home Secretary, in a Debate in this House, spoke of such a conference as being about to be summoned, and is there any date on which we may expect it to start?

Crown as Litigant

asked the Prime Minister whether, seeing that a Committee was appointed by this House in December, 1921, to consider the position of the Crown as litigant, and that the obsolete Crown procedure in civil and quasi-criminal matters still continues to be resorted to, with the result that litigants who prove unsuccessful in disputes with Government Departments are mulcted in costs out of all proportion to the sums in issue, he will fix a time limit within which the Report of the Committee should be presented, so that as a litigant the Crown should be placed in the same position as any subject of His Majesty?

I have been asked to reply. No such Committee has been appointed by this House. The right hon. Gentleman is presumably referring to a Committee appointed in December, 1921, by the Lord Chancellor (Lord Birkenhead) and the then Attorney-General (Sir Gordon Hewart), "To consider the position of the Crown as a litigant and to make such proposals for the modification of the existing law upon the subject as may best conduce to efficiency and economy, with due regard for the necessity for the safeguarding of the collection of the revenue."

The matters to be considered by the Committee are highly technical and of great delicacy and importance, and I am not prepared to suggest to the Lord Chancellor that a time limit should be fixed for the presentation of the Committee s Report. I understand, however, that the Committee has made very substantial progress in the consideration of the matters referred to. I must add that I cannot accept the suggestion made in the question that litigants are in consequence of the present state of the law mulcted in costs out of proportion to the sums in issue.

Wireless Telegraphy and Signalling Bill

asked the Prime Minister whether, in view of the importance of the Measure to listeners-in, he can state when the Government proposes to take the Second Reading of the Wireless Telegraphy and Signalling Bill?

In view of the decision to hold a general inquiry into the broadcasting system towards the close of the year, the Government have decided not to proceed this Session with this Bill. A short Bill will be introduced instead, with the single object of resolving any doubt as to the validity of the existing licence system.

Electricity Undertakings

asked the Prime Minister if he can give an assurance that any Government assistance given to electricity undertakings for the purposes of any scheme of general electrification will also be extended pari passu to gas undertakings?

The PARLIAMENTARY SECRETARY to the MINISTRY of TRANSPORT
(Lieut.-Colonel Moore-Brabazon)

I have been asked to reply. As the Government's proposals with regard to electricity have not yet been formulated I cannot say whether they will involve any form of assistance to electricity undertakings. My hon. Friend's question is therefore premature.

Court of International Justice

asked the Prime Minister whether the Government are prepared to accept the compulsory jurisdiction of the Court of International Justice in each of the cases contemplated by Article 36 of the Statute of the Court?

Government Employes (Civil Rights)

52 and 53.

asked the Prime Minister (1) whether, in view of the division of opinion among the members of the Blanesburgh Committee expressed in paragraph 66 of their Report, the Government will grant full civil rights to all manipulative workers in Government offices and establishments;

(2) whether the Government propose to adopt the recommendation of the Blanesburgh Report and allow full civil rights to all industrial workers in Government workshops and establishments?

As stated on the 21st May in reply to a question by the hon. Member for Edge Hill, this Report is now under consideration.

Colonies (Native Questions)

asked the Prime Minister whether the advisory body upon Colonial problems, which it is proposed to create, will include within its functions such problems as the condition of native labour, the migration of natives for industrial purposes, and the increasing difficulties due to Colonial natives temporarily resident in Europe for industrial and educational purposes?

As Lord Balfour intimated in the House of Lords, the Committee referred to in this question will probably be framed on the general lines of the Committee of Imperial Defence. In that event, there will be no terms of reference or list of members. The Colonial Office and other Government Departments will refer to the Committee such questions as they think desirable, on the analogy of the Committee of Imperial Defence.

Air Ministry

asked the Prime Minister whether he can give an assurance to the House that it is the settled policy of the Government to maintain the Air Ministry as the Department responsible for aviation, development of airships, and air defence, and not to diminish its responsibilities or to absorb it in the Admiralty or any other Department?

No change is at present contemplated in the existing responsibility.

Inter-Allied Debts

asked the Secretary of State for Foreign Affairs whether he has any information of a notification by the United States of America to the Governments of France, Italy, Belgium, Greece, Rumania, Czechoslovakia, Jugo-Slavia, Esthonia, and Latvia in regard to a proposal for funding agreements for the debts owed by those Governments to the Government of the United States; and whether any progress has been made by His Majesty's Government with any of these Governments for the funding of their debts to Great Britain?

asked the Secretary of State for Foreign Affairs what progress has been made by France and Italy in their negotiations with the United States for the funding of their debts to that country; and whether he has secured from the French and Italian Governments a recognition of the principle that no steps should be taken by those nations to fund or liquidate their obligations to the United States without a similar step being taken to meet their obligations to this country?

I under stand that a Note has been addressed by the Government of the United States to the Governments of the European countries which are in their debt drawing their attention to the desirability of commencing official conversations with a view to debt funding. I have no further information, other than what has appeared in the Press, on the subject of the progress of the negotiations with France and Italy.

No further developments have taken place in regard to the negotiations on the subject of the debts due to this country. His Majesty's Government have made it clear that any steps taken by debtor Powers to fund or liquidate their obligations to the United States should be accompanied by similar steps as regards their obligations to this country: and, of course, there is no alteration in our position.

Does that mean that we are also going to follow this Note of the United States with a Note to the Powers affected asking for a consideration of the matter?

Would it not be a wise thing to open up discussions with America with reference to the action that has been taken by them in order to see if we can act jointly with them.

I think it would be best to await and see the answers which are sent to America.

Is it not a fact that the only active negotiations at present going on are between this country and France, and that these other Powers mentioned in the question which had been dealt with by the United States are not now conversing with us in the matter. Why are we not sending a Note to them also?

British Investors (Defaulting States)

asked the Secretary of State for Foreign Affairs whether he has received any representation from the United States Government in regard to the individual States which are in arrears, or have defaulted in the payment of interest and the return of principal of money borrowed from British investors; whether he will consider the desirability of coming to a settlement with the representatives of the original investors, in loans which were made for purposes other than those connected with the Civil War in America, by purchasing their claims and arriving at a settlement with the American Government on behalf of the individual States, thus securing to the bondholders some payment for a debt which is at present valueless and at the same time materially benefiting the taxpayer in this country.

The reply to the first part of the question is in the negative. I am quite unable to entertain the suggestion contained in the second part.

Does the right hon. Gentleman not think it desirable that people in this country should press for debts owing to them?

I have no objection to the people who are owed debts pressing for their payment, but my hon. Friend's suggestion is that His Majesty's Government should buy up these debts and then present the claim not to the party in default but to the United States.

Is the right hon. Gentleman not aware that my question was whether we had been approached in the matter by the United States?

Is it not the case that these States which did incur the debt are now part of the United States of America, and ought they not to take over the liabilities when they take over the States?

Morocco

asked the Secretary of State for Foreign Affairs whether any portion of the Tangier territory has been occupied or used by the Spanish troops in their conflict with the Riffis; whether diplomatic representations have been made against this violation of the frontier; if so, with what result; and whether any further steps are contemplated?

In the course of operations against the tribes situated near the frontier of the Tangier zone, small bodies of Spanish troops crossed the boundary on one or two occasions. Representations were made to the Spanish Government, who at once gave an assurance that they would do all in their power to avoid a repetition of such incidents.

May I ask if the practice has, in fact, ceased, or has considerable difficulty been found in getting rid of the Spanish forces inside the Tangier zone?

I do not think the efforts of the Spanish Government were immediately and wholly successful. I do not remember any very recent case.

asked the Secretary of State for Foreign Affairs whether pro- posals of any kind have been made to the British Government that they should offer naval co-operation to the French in their Moroccan war?

Czechoslovakia (British Air Service)

asked the Secretary of State for Foreign Affairs whether, in view of the German refusal to allow any regular British air service to cross to Czechslovakia, he proposes to take any action?

The German Government are free to sanction or refuse to sanction such flights of aircraft over their territory as they think fit.

Royal Navy

Leave Rates

asked the First Lord of the Admiralty, if he can see his way better to equalise the leave rates as between foreign service and the Atlantic Fleet, seeing that those serving in the Atlantic Fleet get 42 days' leave each year and those serving abroad only 14 days?

Although men serving in the Atlantic Fleet get 42 days' leave a year, this is to compensate them for the absence of week-end leave and other advantages which service at a home port carries with it. The grant of 10 days' drafting leave to men before proceeding abroad in effect raises the scale of foreign service leave to approximately 18 days a year, and as drafting is so arranged that all men get about the same amount of foreign, Atlantic Fleet, and home harbour service, no reason is seen for altering existing arrangements.

Tuberculosis

asked the Parliamentary Secretary to the Admiralty what percentage of naval ratings invalided during the year 1924 owing to tuberculosis was attributable to service; and what percentage was considered to be not attributable to service?

Cooks (White Suits)

asked the Parliamentary Secretary to the Admiralty whether, in order to ensure cleanliness in dress among newly-entered naval cook ratings, he will increase the number of white suits and aprons from two, as now issued, to four, observing that this branch considers a clean suit essential at least every other day?

Housing

Steel and Other Houses

asked the Minister of Health how many houses of the types known as the Telford, Atholl, and Weir have been sanctioned for subsidy; and the average price at which contracts have been made for each type?

Apart from the demonstration houses, for which special arrangements have been made, approval has been given to the erection of 164 Telford houses and 12 Atholl houses as eligible for subsidy under the Housing Acts. The average price per house, including foundations, paths, fences, etc., at which contracts have been made, is £490 for the Telford houses and £630 for the Atholl houses. As regards the Weir houses, as the contracts for these have all been let in Scotland, a question should be addressed to my right hon. Friend the Secretary for Scotland.

Are any efforts being made to popularise steel houses by the local authorities?

Yes, Sir; the local authorities in this country will shortly be erecting a number of demonstration houses for that purpose.

May I add that my question was in regard to steel houses generally, and not just the Weir type?

Do I understand the hon. Gentleman to say that figures are not available at the Ministry of Health as to the cost of houses built in Scotland?

No, Sir. What I said was that any question as to the price of houses for which contracts have been let in Scotland should be addressed to the Secretary for Scotland.

Is not the hon. Gentleman able to tell us whether the Weir house is above the Telford house and the Atholl house, or midway between them, or below them, in the matter of cost?

As far as the erection of houses in this country is concerned at the present time, it is confined to demonstration houses. As far as Scotland is concerned, a number of houses have been already undertaken by private individuals and various councils, and, therefore, as regards the price of those houses, obviously the Secretary for Scotland is the proper person to reply.

Is the hon. Gentleman aware that the London County Council have erected or are erecting a certain number of Weir houses in London, some within a few minutes' walk of this House, and cannot be ascertain the price from that authority?

No, Sir, the hon. Member is mistaken. The London County Council are erecting demonstration houses, in order that people may see them, and decide whether they are suitable. The question I am asked is as to the average price at which contracts have been entered into.

Is it not desirable that the hon. Gentleman's Department should have the figures regarding the Weir type even in Scotland, so that hon. Members and the general public may know the relative cost of the various types?

An explanation of the matter can be easily obtained by putting a question to the Secretary for Scotland.

called upon Captain WATERHOUSE to put the next Question on the Paper (No. 67).

Government Houses, Chepstow

asked the Secretary of State for the Home Department if he is now in a position to make a statement regarding the rents charged for the Government houses at Bulwark and Hardwick, Chepstow?

The answer is in the negative, but it is hoped that a decision will be arrived at very shortly, when I will communicate with the hon. Member.

Are negotiations proceeding for the sale of some of these houses to a private syndicate at a very low rent; and, if so, are they making arrangements for the occupants to purchase?

I think perhaps the hon. Member had better put down another question.

Contributory Pensions Bill

asked the Minister of Health what reduction in the rates of the city of Leicester will be possible as a result of the passage of the Widows', Orphans' and Old Age Contributory Pensions Bill?

My right hon. Friend has not made inquiries as to the relief to the rates which is likely to occur as the result of the passage of the Widows', etc., Bill, except in a few typical cases, but he has no doubt that my hon. and gallant Friend could obtain the desired information from the clerk to the Leicester Guardians.

Will the hon. Gentleman now direct that inquiries be made, because it is a very important point?

Will the hon. Gentleman also have inquiry made as to the cost to the industries and workpeople of Leicester?

I do not think we can use Question Time for this purpose. Every constituency would wish to follow suit.

House of Commons Refreshment Department

asked the right hon. Member for Cheltenham, as Chairman of the Kitchen Committee, whether he can give the average weekly consumption of wine, spirits, and beer, during the months of February, March, and April, 1925, in the refreshment rooms of the House of Commons?

It will be, I regret, impossible for the Committee, with its limited staff, to supply the hon. Member with the numerous statistical details mentioned in his question. I would suggest that the Special Report of the Kitchen Committee, ordered to be printed on the 25th March, 1925, may give him some of the information he requires.

Is it outside the bounds of the business capacity of the Kitchen Committee to give the totals of the purchases of wine, beer and spirits during the various periods?

Might I suggest ' that at the same time note should be taken of the amount consumed by each individual Member, so that we may know whether the Liberal party, the Labour party, or those on this side of the House are contributing the largest proportion to the revenue?

Is it not the case that our very welcome visitors consume a large part?

Birchenwood Collieries

asked the Secretary for Mines whether he has yet approached the Treasury with regard to the application of Kidsgrove Urban Council for the guarantee of a loan to prevent the closing of the Birchenwood collieries, which it is estimated would throw out of employment 2,600 people and cost £3,000 per week in unemployment benefit.

No, Sir. Any application for such a guarantee should be made direct to the Trade Facilities Act Advisory Committee, with whom the urban council have already been in communication. But I am given to understand that efforts are being made to raise the necessary money without Government assistance.

Unemployment

Norwegian Domestic Servants

asked the Minister of Labour under what conditions female Norwegian domestic servants are allowed to enter this country?

( for Sir ARTHUR STEEL - MAITLAND): Permits, under Article 1 (3) ( b ) of the Aliens Order, 1920, to enable employers to introduce aliens from any foreign country as domestic servants or in any other employment are not, in general, issued unless persons suitable for the prospective employment cannot be obtained here, and the rate of wages proposed is not less than that usually paid to British employés for similar duties.

Uncovenanted Benefit

asked the Minister of Labour whether he can see his way to prepare a Bill or take other steps to waive for a further period of 12 months the provisions of Section 3 of the Unemployment Insurance (No. 2) Act, 1924, requiring payment of 30 contributions to entitle the contributors to receive the benefits provided by the Unemployment Insurance Acts?

I would refer the hon. Member to the reply given on Wednesday last to a similar question by the hon. Member for Blackpool (Sir W. de Frece).

Broadcasting Licences

asked the Postmaster-General the number of broadcasting licences issued to 30th April; and the amount of revenue collected from 1st January to 30th April?

The number of broadcast receiving licences in force on the 30th April was approximately 1,356,000, and the total amount collected from the 1st January to the 30th April was approximately £268,000.

Are there any figures showing the number of unlicensed sets in use, or is there any estimate of the number?

Secondary Education

asked the President of the Board of Education what would be the cost of providing free secondary education to the age of 16 for all children; and how many extra pupils this would ensure?

( for Lord EUSTACE PERCY): It is quite impossible, in the short time available, to carry out the elaborate and detailed investigations which would be required before even an approximate figure could be suggested. The hon. Member does not appear to have in mind free compulsory education up to the age of 16, so that it is not possible to say how many children would benefit by the freeing of the schools, or, consequently, to prepare any reliable estimate of the cost involved. My right hon. Friend may, however, refer the hon. Member to the rough estimate of the cost of doubling the existing secondary school accommodation which he gave the House in the Debate on the 24th February last.

Government-Owned Ships, Australia

asked the President of the Board of Trade if he has any information in regard to the sale of the Australian Government ships; and who purchased the ships?

I have been asked to reply to this question. I have no information beyond what has appeared in the Press.

Does the hon. Gentleman know that the Australian Government suffered an immense loss on this transaction?

Juveniles (Places of Detention)

asked the Home Secretary which cities have remand homes for children charged before the Juvenile Courts; and for how many children these homes have accommodation?

122 cities and boroughs have places of detention for children and young persons. Information as to the exact accommodation of these places of detention is not available, but during the year ended 31st March, 1924, they received, approximately, 2,833 children and young persons. This figure includes some cases sent by county police authorities.

Aliens

Deportation Orders

asked the Home Secretary how many aliens have been deported on account of treasonable activities against the peace of this country between 1st November, 1924, and 1st May, 1925?

During the six months ended 30th April last deportation orders were made against 173 aliens. They were all held to be undesirable for one reason or another, but I do not think it would be in the public interest to attempt to specify more precisely the grounds of objection to their continued presence here. None of them had actually been convicted of treasonable practices.

Immigration

asked the Home Secretary how many aliens have been allowed into Great Britain for permanent residence since the present Government took office; and can the reasons for any such admissions be generally stated?

This question involves the examination of many figures and I should be obliged if my hon. Friend would postpone it till Thursday.

Temporary Army Commissions

asked the Secretary of State for War whether he is aware of any Army Orders enabling the nomination to temporary commissions before the War; whether after the outbreak of the War there are any Army Orders which deal with temporary commissions before 1918 other than Army Order 394, 1914, published on the 16th September, 1914, and Army Order 473, 1914, published on the 9th November, 1914; if so, will he refer to such Orders; and will he state under what Army Orders or other authority re-enlisted pensioners were promoted to the rank of temporary officers?

I am aware of no Army Orders either before, during or after the War enabling the grant of temporary commissions, of which some 250,000 were given during the War, and no such Army Order was necessary. The Army Orders quoted by the hon. Member do not authorise the grant of commissions but delegate to certain general officers commanding the power to make nominations. Article 24 of the 1913, 1914 and 1922 Pay Warrants conveys the King's authority for the grant of commissions, and the form of application for a temporary commission shows the conditions for qualification. The commissions were given under the King's signature. The pensioners who re-enlisted for the duration of the War were given temporary commissions under exactly the same authority as the rest of the soldiers and civilians who were given temporary commissions.

Does my hon. and gallant Friend suggest that these men put in applications for their commissions?

Certainly, there were application forms for these temporary commissions.

In every case? My hon. and gallant Friend's suggestion is entirely contrary to my information.

I do not bind myself to every case, but that was the general procedure. I should have to look into it before I can give a reply to his question.

asked the Secretary of State for War whether there is any language used in the commissions granted to ranker officers that is not to be found in that of regular officers; if so, will he state what the difference in language is, and the name of any ranker officer promoted before 1918 in whose commission it is to be found; and does the War Office rely for the attitude they have taken up in regard to the rights of ranker officers upon the articles set out in paragraph 3 of Command Paper 2076, issued by the War Office on the 10th March, 1924?

The same form of commission was used for temporary commissions as for permanent commissions, the only difference being that the temporary commissions were clearly marked temporary both on the face of the commission and on the endorsement outside. This applies to the whole of the officers, some 250,000 in number, who were given temporary commissions during the War. The grounds on which the War Office rely for the attitude they have taken up regarding the claim of the professional ex-ranker officers are clearly stated in the Memorandum which they laid before the Barnes Committee and which is printed in the evidence. The intention and effect of the particular Articles of the Pay Warrant to which the hon. Member refers were fully dealt with by the Barnes Committee in paragraph 12 of their Report.

ATTORNEY-GENERAL v. HOUGHTON

asked the Chancellor of the Exchequer whether his attention has been drawn to the Report of the Attorney-General v. Houghton ("The Times," 13th May); whether he is aware that in that case, in order to recover the sum of £35 loss arising from repudiated bids at a sale by the Disposal Board, the procedure of an information by Mr. Attorney-General on behalf of His Majesty, with trial by a Judge of the High Court with a special jury, was resorted to, and that the special jury in the case referred to returned their fees to the plaintiff at the trial as an expression of their sympathy with him; and whether the Crown will consider the expediency of foregoing their claim to costs?

I have now seen the report of this case, and observe that the special jury in the case, which only lasted, I am informed, about 20 minutes, returned their fees to the defendant. Having regard to all the circumstances, I am not prepared to go in any way beyond the decision of the Court.

Does my right hon. Friend appreciate that to sue by way of an information for £35 is producing a state of scandal which is very frequent?

There is no possibility of taking these cases to a County Court, and the Government counsel offered to take the case without a jury, but the defendant would not agree.

Will my right hon. Friend take the case into consideration with a view to urging the Lord Chancellor to appoint a Commission as to the position of the Crown as a litigant?

Middlesex County Council Bill

Reported, with Amendments; Report to lie upon the Table, and to be printed.

Message from the Lords,

That they have agreed to,

Church of Scotland (Property and Endowments) Bill, without Amendment.

Orders of the Day

Finance Bill

Order for Second Reading read.

Motion made, and Question proposed, "That the Bill be now read a Second time."

I beg to move to leave out from the word "That," to the end of the Question, and to add instead thereof the words

Twelve months ago the Tory party, then in opposition, moved no Amend- ment to the Second Reading of the Finance Bill, neither did they divide against it nor vote against it at any stage of the proceedings. Indeed, the only objection which the Conservative party had to the Finance Bill last year was the repeal of the McKenna Duties, which had been done to redeem the pledges of successive Governments of which members of the present Government had been members, and to which they were definitely committed. I think there will be general agreement that the supporters of the present Government expected, above all things else, from this Government that its policy would be directed to the stimulating of trade and to the reduction of national expenditure and of the heavy burdens of taxation, which the party opposite maintain are in a considerable measure responsible for trade depression. The Government have now been in office for a period almost equal to the whole time the Labour Government were in office. What have they accomplished in that time to satisfy the expectations of those who returned them to power? They have raised the number of unemployed by 150,000 compared with the numbers 12 months ago. They have depreciated the value of Government stocks and thereby made impending conversions much more expensive.

What does the right hon. Gentleman mean by "impending conversions"?

Within the next four years—[ Laughter. ] Yes. According to statements made by the Chancellor of the Exchequer, his Government is going to be in office during the whole of those four years. [HON. MEMBEES: "Hear, hear."] Well, we will wait and see. They have made the cost of these impending conversions, which they will have to undertake by him, if the expectation of the Chancellor of the Exchequer is realised, much more, expensive. They have increased the cost of the weekly borrowing on Treasury Bills by 1 per cent., which increases the annual cost by something like £6,000,000 a year. In this Budget, embodied in the Finance Bill, they are estimating for an expenditure of £9,400,000 more than the estimate expenditure of a year ago, and £3,700,000 more than the actual expenditure of last year.

Let the House remember that that is by no means the end. There is no provision for Supplementary Estimates. I am quite sure that this is not going to be the only Government which can escape from the necessity of introducing Supplementary Estimates. Indeed, Supplementary Estimates are already foreshadowed in the increased expenditure upon the Navy, and in the increased expenditure, upon the Air Force. The tax revenue for which the right hon. Gentleman has Budgeted is £1,000,000 more than was the case last year. As I have already said, the party opposite declare that the strain of huge national expenditure is one of the main causes of trade depression. They expected the Chancellor of the Exchequer would make some reduction of taxation. There is only one effective, indeed only one possible way of reducing taxation, and that is by reducing expenditure.

The right horn. Gentleman's advent to office was hailed as an omen of great things in the way of the reduction of national taxation. We were told, "Here is the poacher turned gamekeeper." The right hon. Gentleman has been in almost every one of the Government Departments. He has been in all the great spending Departments. We were told that he knew the ropes, and that he would be able to place his hands upon unnecessary expenditure. Apart from this knowledge, it was said that he was the man to do it; that he was a man of great moral courage. These were the expectations which the appointment of the right hon. Gentleman to his great and responsible office excited in the breasts of the Tory party in the country. Now, they have got his Budget, and there is not a Tory newspaper in the country which is

The right hon. Gentleman had a surplus of £26,000,000, derived from the wise and prudent finance of the Government which preceded this Government. I was repeatedly told last year, when I inherited a surplus from the previous Government, "Any fool can make a good Budget out of a large surplus." I do not insinuate for a moment that the right hon. Gentleman is a fool, but, at any rate, he has not succeeded in making a good Budget, even with a large surplus. He had £26,000,000. Just sufficient to reduce the Income Tax by 6d. in the £. But that would not have been spectacular. That would not have been dramatic. The right hon. Gentleman, therefore, instead of doing that simple thing, surveyed the whole field of our national finance, upset our taxes, and set one of the greatest of our industries in turmoil and unrest. He has taken off taxes here and he has put on taxes there, with the result that at the end, as far as revenue is concerned, he is just where he was when he started. The right hon. Gentleman has not shown as much wisdom as a certain African native who was interviewed by a missionary who told him that he had come to civilise him. "How are you going to do it?" "I am going to teach you how to work." "Why should I work?" "To get rich." "Why should I get rich? " "So that you do not need to work." And the native said: "Why should I take all that trouble to get where I am now?" The right hon. Gentleman has not as much common sense as that African, native. He has taken all this trouble, from the revenue point of view, to get exactly where he was before. In doing this, he has materially altered the basis of taxation. He has, as I said just now, upset trade, and he has violated definite pledges given by the Government. There is a method in the right hon. Gentleman's madness. The right hon. Gentleman was very frank to confess what is his purpose in taking off certain taxes and imposing others. Speaking in one of the recent Budget Debates, he said: basis of taxation, and we know what broadening the basis of taxation means. It is not putting the biggest burden on the broadest back. They had a very broad basis of taxation in the early part of last century. Then practically the whole of the national revenue was raised indirectly on a broad basis of taxation. That is the right hon. Gentleman's confessed purpose. His confessed object is to remove taxes from the incomes of the rich and to get revenue compensation by taxing industry and oppressing the poor. It has been the policy of previous Tory Chancellors of the Exchequer to look after their own hard-pressed Income Tax payers. The right hon. Gentleman the Member for Hillhead (Sir R. Home), when he was Chancellor of the Exchequer, out of a huge surplus reduced the Income Tax by one shilling in the pound. The Prime Minister reduced it by sixpence. But the right hon. Gentleman cannot wait. He cannot give them more relief out of the surplus of revenue. He must give them relief, and especially the richer of his own hard-pressed Income Tax payers.

In his opinion, the mass of the people are not paying a fair share of taxation. He tells us that the present rates of taxation are 62·7 direct and 37·3 indirect. He seems to aim, in the immediate future, if he gets his own way and continues in office, at what is called a 50–50 per cent. There never was greater nonsense talked in this House than to say that you can get a just system of taxation on the basis of 50 per cent, direct and 50 per cent, indirect. What does it mean? It assumes that the indirect taxpayers have the same capacity to pay, the same ability, and the same surplus income and wealth as those upon whom the direct taxes fall. I know there is plenty of precedent in past history for that. Why, so recently as 1905–6—and in the last Tory Government before the great Liberal triumph of 1906—when the right hon. Gentleman the Member for Carnarvon Boroughs (Mr. Lloyd George) and his friends came into office, at the end of 1905, they found that indirect taxation accounted for £70,000,000 of the national revenue and direct taxation for only £51,500,000. There then began a fairly rapid trend in the other direction, and in the succeeding years the proportions were almost reversed. But practically during all the nineteenth century the whole of the national revenue was raised by indirect taxation. Nobody knows that better than the present Chancellor of the Exchequer, because in his Free Trade propaganda days he often referred to the fact that under a system of Protection you had an enormous number of articles taxed. As a matter of fact, in the early part of the nineteenth century, under the system to which the right hon. Gentleman wants to get back and towards which he is taking the first step in this Budget, no less than 1,200 separate articles in use and of consumption were taxed.

This idea of the equalisation of the percentages and proportion between direct and indirect taxation ignores altogether the relative capacity of the two classes. At a time like this the trend from 1906 to 1914 ought to be accentuated, because in those years—I use the word very judiciously—the earning classes were relatively in a fairly prosperous condition, certainly better than they are to-day so far as the value of their money is concerned. Since 1913 the Income Tax classes have enormously increased their wealth and income, and their capacity to-day is greater than it was ten years ago. The right hon. Gentleman himself told us a week or two ago that the yield of a penny on the Income Tax is increasing. He tells us in this White Paper that he expects that in a full year the cost of 6d. reduction in the Income Tax will be found to be £30,000,000. When the right hon. Gentleman the Prime Minister reduced the Income Tax by 6d. two years ago he estimated the loss at £26,000,000. In 1924, the yield of one penny on the Income Tax was under £5,000,000. The Chancellor of the Exchequer tells us that to-day it is £5,500,000.

What of the Super-tax payers, the special object of the right hon. Gentleman's compassion? In 1913 there were only 14,000 of them in the country with incomes over £5,000. To-day we are told by the Treasury their number is 27,000, or nearly double. And what of wages? The Ministry of Labour tells us that since the slump in trade came about the wages of the working classes have dropped by £500,000,000 a year. The hard-pressed Income Tax payers are getting richer, the wage workers are getting poorer, and the right hon. Gentleman, by his Budget proposals, is aiming at making the hard-pressed Income Tax payers get richer at a more rapid rate and at putting additional taxes upon the depressed and declining wages of the working people. How much are the working people paying in taxation? It is accepted without dispute that four-fifths of the Customs and Excise Duties are paid by the non-Income Tax paying class. Therefore, these wage workers who have lost £500,000,000 a year in wages during the last year are this year paying in Customs and Excise Duties roughly £200,000,000, against £405,000,000 raised by direct taxation. Therefore the rich out of their super-abundance are only paying double in taxation what is contributed by the wage-earning classes, and the Chancellor of the Exchequer wants to get back to fifty-fifty. He wants, if he succeeds in carrying his Budget, to have a broadening of the basis of taxation, and if he takes £100,000,000 of taxation and puts it on the non-Income Tax paying class and takes £100,000,000 of taxation from the Income Tax paying class he will get his fifty-fifty.

Take one other fact in regard to the growing wealth and increasing incomes of relatively a very small section. In replying to a question to one of my hon. Friends a week or two ago, the Treasury volunteered the information that the gross income brought under review in the last year for which figures were available for Income Tax purposes was £3,050,000,000. The year before the War it was less than £1,000,000,000. I have never seen any estimate of the total national income at present which puts that income higher than £4,000,000,000. I doubt if it would be so high as that. I should be inclined to take it as nearer £3,000,000,000, but I think it well to give the right hon. Gentleman the advantage of the argument. Out of £4,000,000,000 income the Income Tax payers are taking £2,300,000,000 and the 89,000 Super-tax payers are taking £510,000,000, with an average income of £5,732. Yet the Chancellor wants to get back to the standard of fifty-fifty. His policy is to relieve the hard-pressed Income Tax payers; these people who get £2,300,000,000, and he wants to make up for that relief to them by putting additional taxation upon that class of people who, when they are taxed, as Mr. Gladstone said, can only pay the tax by going without what is necessary to their physical support, let alone their enjoyment of the ordinary comforts and decencies of life.

I made certain remissions of indirect taxation last year. Let me just give the House a summary of the remissions of taxation, not to the indirect taxpayers, but to the direct taxpayers, which have been made in the last three Budgets previous to this one, or the last four Budgets. There has been a remission of £130,000,000 a year in Income Tax, or 2s. in the £. The Corporations Profits Tax has been abolished; that is £24,000,000 a year. Two years before that the Excess Profits Duty was swept away altogether.

The party opposite have made no reduction in indirect taxation except £5,000,000 given in reduction of the Tea Duty by the right hon. Gentleman the Member for Hillhead, and £16,000,000—I think that that was the figure—reduction of the Beer Duty two years ago. I made a remission of £30,000,000 last year. That altogether is £51,000,000 reduction in indirect taxation as compared with £150,000,000 reduction in direct taxation. The right hon. Gentleman in his Budget speech referring to the reductions in indirect taxation in the shape of the food taxes, which I made last year, said that I had prepared the way for the contributions towards the widows' and orphans' pensions. These reductions had benefited the working classes, and therefore, said the Chancellor, they can afford to pay these contributions. That is to say he is trying to get back in this form some of the relief of taxation which I gave last year.

It is very interesting to see now the proposed relief of the hard pressed taxpayer is going to operate. Turning to the table on page 14 of the White Paper, we see a number of very illuminating facts. For instance, we get the case of a man who is earning an income of £500 a year. He gets by the Chancellor's concession relief to the extent of £6 2s. 9d. Take the case of the man who has £5,000 a year unearned, a man I suppose belonging to the class who are described in the Census Returns as gentlemen living upon their incomes. That man gets relief to the extent of £248 a year. That is to say, his income is 10 times larger than the man with £500 a year, but the relief which he gets from the Chancellor of the Exchequer is 40 times as great. There is a certain amount of scriptural justification for that:

The Chancellor of the Exchequer stated in the course of one of his speeches that in giving relief of taxation no policy is so simple, so well applied, so efficacious, and so safe as the diminution of taxation falling on production. The Chancellor of Exchequer said that. I wonder if he now thinks that his proposed new taxes will be so simple. I wonder if he anticipates that they will be so efficacious. I am not going to argue that statement of the Chancellor of the Exchequer. There is a great deal to be said in refutation of it, but I gladly accept it in order to show how the actual proposals of the Chancellor of Exchequer are carrying out that principle. There is, he said, nothing so efficacious and nothing so much needed as a diminution of taxation on production. Then when he said that he went on to put a new tax upon a new and growing industry. He went on to do what no Tariff Reformer in his maddest moment ever proposed to do—to put an import duty upon the raw material of one of our great growing and most promising industries. The right hon. Gentleman defended the reduction of Income Tax and particularly the reduction of Supertax on the ground that these taxes are an impediment to the creation of new capital. Therefore, he reduced the Supertax and he reduced the Income Tax, because he wanted these remissions of taxation to go into business in the shape of new capital, and then when he had done that he put a tax upon capital so as to get back the amount which would be lost by reducing the Income Tax and Super-tax.

Turn, for a moment, to another page of this statement, and just analyse how the right hon. Gentleman is doing that. It is quite evident from the step which he is taking that the hard-pressed Income Tax payers are all in a measure objects of the sympathy of the right hon. Gentleman, but it is the hard-pressed millionaire who gets the bulk of the right hon. Gentleman's compassion. He has raised the rates of estate duties on estates between £12,500 and £1,000,000. The rate of increases begins with 1 and 2 per cent. and reaches 4 per cent, in the case of estates of £50,000. Then when he gets into the higher scales he begins to reduce. His excuse for increasing the scale of Death Duties was that he wanted some compensation for the relief which he had given to the Super-tax payers. If the right hon. Gentleman has nothing better to do than taking his hand out of one pocket and putting it into another pocket I have nothing to say. But he is not even doing this justly. He is not taking altogether from the same people, by increasing the Estate Duties, as those to whom he is giving relief by reduction in the Super-tax, because a person with an estate of £40,000 does mot come within the category of the Super-tax payers as the income would be only £2,000. But he raises the duties from £12,500, which will bring in an income of about £600 a year, and he is putting extra taxes on the estates of these people in order to relieve the millionaires at the other end of the scale. We know now the right hon. Gentleman's sympathy for the hard-pressed Income Tax payer.

Another of his great projects was to stimulate production by removing the burdens upon industry, and in looking round for a luxury expenditure he discovered artificial silk. It is quite true that this is an article which was being increasingly used by the working people of the country. "Scandalous!" exclaimed the right hon. Gentleman, "that they should dress in silks" Recently I saw on the window-sills of many of the houses in a sordid and blackened part of this great city, an attempt to beautify by means of flowers in pots. Had the right hon. Gentleman seen that, he would have said, "Scandalous! Waste and luxury! I will put a tax on them." And the right hon. Gentleman would add, "Of course they need not pay the tax if they do without the flowers." That is the case with artificial silk. It is a growing industry. It had been the salvation of the cotton and woollen trade of Lancashire and Yorkshire during the last three or four years. The right hon. Gentleman wanted to stimulate industry and to lighten its burdens. What did he say in his speech?

The last part of our Amendment deals with a matter which is omitted from the Budget. The right hon. Gentleman asked us the other day if we would suggest other sources of taxation which he might have adopted and which would help generally the revenue that he required. In view of the right hon. Gentleman's past upon the question of the taxation of land values, I thought that we had a right to expect that he would use the first opportunity he had to give effect to proposals on what he has repeatedly described as "a great public scandal, and an urgent public necessity." I have here the full report of a speech which is one of many speeches made by the right hon. Gentleman on this question. He told the electors of Dundee, one of the many constituencies that he has had the honour to represent:

That is the first useful suggestion which has ever emanated from the brain of the hon. Member. Let me quote a statement in the speech of the right hon. Gentleman:

"A landlord happens to own a plot of land on the outskirts or at the centre of one of our great cities. He watches the busy population around him making the city larger, richer, more convenient, more famous every day, and all the while sits still and does nothing. Roads are made, streets are made, railway services are improved, electric light turns night into day, electric trams glide swiftly to and fro, water is brought from reservoirs a hundred miles off in the mountains. And all the while the landlord sits still. Every one of these improvements is effected by the labour and at the cost of other people. Many of the most important are effected at the cost of the municipality and of the ratepayers. To not one of these improvements does the land monopolist as a land monopolist contribute, and yet by every one of them the value of his land is sensibly enhanced. He renders no service to the community; he contributes nothing to the general welfare."

Then we are told that it is not the man who is bad, but that it is the law which, is bad.

"It is not the man who is blameworthy for doing what the law allows and what other men do. It is the State which would be blameworthy were it not to endeavour to reform the law and correct the practice."

The right hon. Gentleman concluded with an eloquent peroration. He invoked the shade of Mr. Cobden and said:

"The system of local taxation to-day is just as vicious and wasteful, just as great an impediment to enterprise and progress, just as harsh a burden upon the poor, as the thousand taxes and Corn Law eliding scales of the 'hungry 'forties.' We are met in an hour of tremendous opportunity. 'You who shall liberate the land,' said Mr. Cobden, ' will do more for your country than we have done in the liberation of its commerce.'"

What does the date matter? Does the right hon. Gentleman repudiate the sentiment? I will give the date. The speech was delivered in the King's Theatre, Edinburgh, on 17th July, 1909. [HON. MEMBERS: "Oh!"] The right hon. Gentleman, according to his own admission, has made speeches by the yard on the subject. In his own words this was his "hour of tremendous opportunity." What has he done? If we are asked, "Why did we not do it last year?" I reply that those who heard my Budget speech last year will remember that, although it is not usual to anticipate a Budget before its introduction, I gave a very definite pledge that if I stood in the Chancellor's place this year I would introduce proposals for dealing with this matter. The right hon. Gentleman has been a student of this question all these years. I ask him, does he think it right that these vast sums, created, as he says, by the enterprise of the community, by the expenditure of public money, should go to a landlord who sits still and does nothing? For 40 miles round London to-day every district is becoming suburbanised. Everywhere you see agricultural land with the notice "Eligible plots for building purposes." That land was worth £30 an acre a few years ago. It is fetching £600 and even £800 an acre now. The motor omnibus, about which the Minister of Transport was so eloquent a day or two ago, is enriching the ground landlords at a rate beyond the dreams of avarice.

Is the right hon. Gentleman going to stand still, too, and allow this national scandal to go on? Hon. Members opposite and commercial people in the country complain about the burden of taxation, and yet they do not take any steps to stop this drain from the wealth of the community, which, if it were applied to community purposes, for this is wholly community property, would reduce the burden on the local authorities by an enormous amount. Older Members of this House will recollect Sir Tudor Walters', who is one of the greatest authorities in the country upon building and town planning, reciting once in this House a case where, if the increment on land in a certain suburb had gone to the community, it would have paid the entire local rates. Yet the right hon. Gentleman wants suggestions in regard to additional revenue by which he can relieve still further his hard-pressed friends the poor Income Tax payers. Will hon. Members opposite permit me to say that I have always been amazed that they should take up an attitude of hostility on this particular question of land values? I will put this question to them. Do they admit that this growing value of land arises from causes which are in no sense attributable to the energy, enterprise or expenditure of the landowner? If they admit that, then they must say that it is wrong that this value of land should be appropriated by those who have done nothing whatever to create it. That is the question which we want them to answer. For the reasons I have stated I move this Amendment. I do so under no illusion as to the fate of our Amendment in the Division Lobby. The servile hordes will troop obediently, but by no means happily, through the Division Lobbies to-night, but the controversies which have been aroused by this Budget will not be ended by the defeat of our Amendment in the Division Lobby.

I would have preferred, after the very searching and destructive criticism of my right hon. Friend who has just spoken, to have heard someone on the other side of the House, before rising to take part in the Debate myself. But as it is customary for the Chancellor of the Exchequer to get up fairly early in the course of these proceedings, I thought it might meet the right hon. Gentleman's convenience if I were to intervene at this stage. The last occasion on which I had anything to say on the Budget was immediately after the speech of the right hon. Gentleman, and that was not a time when one could fairly examine the propositions put forward. However, I think I indicated the lines of criticism then. The glamour of the right hon. Gentleman's rhetoric has now evaporated. In fact it evaporated pretty quickly, and now we can examine his proposals quite coolly and in a clearer atmosphere.

My first general observation on the Budget, after considering it for a long time, is this. The right hon. Gentleman in framing it does not seem to have taken into account the present condition of the country and the condition of its trade and industry. He does not seem to have said to himself, "Trade is bad; what can I do to help it?" He does not even seem to have said to himself, "What can I do which will least upset it?" There is no doubt at all that the condition of our industry is the dominant fact at this moment, and it is the fact that ought to control and direct all the operations of the Government at this time, in the fifth year of bad trade, with 150,000 people out of employment— as my right hon. Friend has just pointed out—and some of our leading industries in a perfectly desperate condition. In the last three days there have been very grave letters in the Press written by some of our greatest captains of industry— Sir A, S. Pease, Lord Inchcape, and Lord Aberconway. All three are of the same mind with regard to the condition of industry. I saw a letter a day or two ago indicating what is happening in the North. Out of 108 blast furnaces only 36 are operating. I cannot conceive a worse state of things than that. I should have thought that the Chancellor of the Exchequer, in preparing his Budget, would have had the one idea in his mind of considering what was best to be done in view of such a condition of things. The right hon. Gentleman must have done what every Chancellor of the Exchequer has to do before he frames his estimates: he must have inquired what were the prospects of trade. He has told us that he did do so and that he framed his estimates of revenue on the assumption that things were not going to be very much better during the current financial year, but having made that inquiry and having come to that conclusion, he seems to have dismissed the subject entirely from his mind when he began to consider his taxes, and that seems to me to be the cardinal defect of his financial scheme.

I am very glad that my right hon. Friend who spoke last put in the forefront of his criticisms the question of national expenditure. The right hon. Gentleman may say, "What could I do?" I should have thought the first thing to do was to take into account national expenditure, which is very serious, and see whether something might not be done to reduce unnecessary expenditure and unprofitable expenditure, and even to postpone necessary expenditure during the period of depression. I should like to give the House one or two figures. I have no doubt they are known very well, but it is worth while reminding the House of Commons, whose principle constitutional function, after all, is the voting of Supply, to consider what the expenditure of the country is at the present moment. Before the War, the total national expenditure was £200,000,000, and you had to add to that £80,000,000 of rates, so that the total for public purposes, local and Imperial, was £280,000,000. What is it now? The right hon. Gentleman is budgeting for £800,000,000, and the rates have gone up to £160,000,000, so that is a total of £960,000,000. The national income is down as far as the purchasing capacity of the sovereign is concerned— this is the estimate, not merely of Sir Josiah Stamp, who is the greatest living authority on the subject, but it is also the Treasury estimate—the total national income is down by 15 or 20 per cent. compared with the pre-War period. Before the War our total expenditure was one-eighth of our national income; it is now one-fourth. There is a good deal of that expenditure which the right hon. Gentleman could not, with the best endeavour in the world, have cut down. It is an inevitable consequence of the War. There is the interest on debt and there is the Sinking Fund, although I should like to say a little upon that matter if I were not afraid of a charge of heterodoxy. There is also unemployment and pensions.

There are certain items which are inevitable but, on the other hand, there are items of expenditure which, as a consequence of the War, should be reduced. There is our expenditure on armaments. After all, the War removed certain perils which were present to our mind and which forced up expenditure year by year before the War. There is no menace in Europe to our security at the present moment. I know of no military or naval menace in any part of the world, so that if the right hon. Gentleman had said: "We are safe, at any rate for 10 years; let us get through this very bad period and have a real cut in the cost of armaments," it would have assisted.

5.0 P.M.

Let me contrast the position of this country in the matter of expenditure with that of our greatest trade rival in Europe and possibly in the world in another year or two—I mean Germany. Germany has a population of 60 millions. We have a population of 42 millions. The national expenditure of Germany this year is £320,000,000. Ours is £800,000,000. The Army, Navy and Air Force in Germany cost £23,000,000; in our country it is £120,000,000, and we are doing our best to force Germany into reducing that cost. Germany armed to the teeth, burdened and handicapped by her armour, was a much less formidable competitor in trade that she is to-day with only £23,000,000 of a charge in this respect. That is not all. Our National Debt is, I think, £7,600,000,000. We have added within the last year or two a good deal more. Last year we added £1,200,000,000 for the building of houses. Out of that, probably £400,000,000 must necessarily be a dead loss, because you cannot let those houses at economic rents. I am assuming that will be the case. I do not believe that any housing scheme you could have now can produce decent houses for workmen which would give an economic return under present conditions. Therefore, I am assuming that £400,000,000 will be an addition to the burden and the rest is an investment. This year you are adding what the right hon. Gentleman himself estimated at a capital liability of £756,000,000. Our national liabilities are running, therefore, to between £9,000,000,000 and £10,000,000,000. The National Debt of Germany was returned this year at under 3,000,000,000 gold marks, which is £150,000,000. The municipal debt in Germany is practically wiped out. It is no use pretending that that is not a very redoubtable prospect for us, when you have got to consider the difficulties of our trade and our commerce, and how these burdens are handicapping us in entering into the markets of the world and competing for orders on equal terms with countries of this kind. You may say, " What could I do V Well, I think the right hon. Gentleman could have gone more thoroughly into the national expenditure, and not given us a vague promise that next year he hoped £10,000,000 would be taken off, and perhaps another £10,000,000 the following; year, without indicating in the least the direction in which that was going to occur. My right hon. Friend the late Chancellor of the Exchequer pointed out that, so far from that process beginning, it is exactly in the opposite direction, and expenditure this year is higher than it was the year before. Since the War the expenditure has come down steadily, for various reasons, but largely through the very great efforts made by Chancellors of the Exchequer. For the first time, we have a turn upward this year. [HON. MEMBERS: " The second time! "] Well,, it is worse still, if it is the second time. In any case, there is a turn up, and when you take into account the fact that there is £1,000,000 less for unemployment, £1,000,000 less for education, that pensions are down, when you take into account that last year my right hon. Friend pro- vided £3,000,000 for a non-recurrent charge in respect of compensation in Ireland, the change is a serious one. It is a practical addition of £12,000,000 to the expenditure of the year, and that is not all.

The right hon. Gentleman has provided some fresh charges. I do not know what Singapore is down for this year—perhaps nothing—but if it were down for only a £5 note, it is a commitment that is going to be a very serious one, and, whatever the case was before, after the earthquake in Japan it is a wanton piece of extravagance and provocation. There is no justification for it of any sort or kind. Everybody knows how very serious the earthquake was. It was very much more serious than anything that appeared in the newspapers in the way of devastating the resources of that great and friendly country to us, and, even if they were disposed before to contemplate and to plan aggression which would make it inevitable that we should provide against it, everybody knows that that has been put, completely out of their minds by that terrible shock, and we incur this expenditure now, when our national bill is £800,000,000, against £300,000,000 by a great trade rival. I think it is sheer madness to undertake this expenditure.

My right hon. Friend the Member for Hillhead (Sir R. Horne) undertook, two or three years ago, the most searching examination of the national expenditure that has been undertaken in this country since the days of Mr. Gladstone. He went right through the expenditure from beginning to end, with the help of my right hon. Friend sitting here (Mr. Hilton Young), and with the help of a very able committee of first-class business men, who went into the whole of the Estimates, and they brought down national expenditure by several hundreds of millions. It was a very fine achievement. He went through it very ruthlessly, and he has had very little credit for it. It made him very unpopular at the time, as every effort to cut expenditure must. I ask the right hon. Gentleman whether he will not at the present moment, having regard to all this expenditure, go through the Estimates, and sift and comb and press them down ruthlessly. He will have Departments that will fight him, but public opinion will be behind him every time in cutting down all unpro- ductive expenditure, because when you are in business, to cut down productive expenditure is not economy, but quite the reverse. That is the first thing which I should like to put to the right hon. Gentleman.

There is another illustration of the principle which I laid down at the beginning, that the right hon. Gentleman has not really considered the condition, of trade in the framing of his Budget. He does not seem to have considered it in the imposition of new burdens, he does not seem to have considered it in the adjustment of old burdens, and he does not seem to have considered it in the objects of his relief. I know it would not be in order to discuss the new imposts in respect of pensions, and I do not propose to examine it an its merits, but it is quite impossible, as the right hon. Gentleman knows perfectly well, to consider the taxation of the year without taking into account the fact that you are adding £24,000,000 on to the burden of expenditure. It is impossible to do it. He had it in his mind in his financial scheme, and rightly so, and he has adjusted his financial scheme to it, and I think it is the best thing in his financial scheme, if I may say so. May I also say that the party behind him are recommending the Budget to the country on that ground? [HON. MEMBERS: "Hear, hear!"] I am only putting that point in favour of what I am saying.

I had given me the other day a very beautiful picture in defence of the Budget. There are a number of very attractive widows. The artist has evidently got the best models. There are one or two old age pensioners and aged labourers, and they are knocking at a door. The question is: "Who opened it?" And there is a gentleman in the corner, a benevolent-looking gentleman, with a high and unthatched dome, doing his best to open the door to them. At first I thought it was my right hon. Friend the Chancellor of the Exchequer, but I see that the artist is much more just, and has sacrificed art to justice, because he has made the picture a composite of my right hon. Friend and the Minister of Health, choosing the better features of each. He has chosen my right hon. Friend's head and the Minister of Health's face. There is one widow here who looks as if the Home Secretary had sat for her model. They are very unfair to the Prime Minister. They have left him out, unless I have mistaken this aged labourer for him, because there is a certain resemblance in the features, but I am sure the right hon. Gentleman looks much more alert than this.

All this is in order to recommend the Budget. So, therefore, you cannot consider the financial scheme, whether for electioneering purposes or for the purposes of more serious examination in the House of Commons, without taking into account the fact that you are imposing a new burden of £24,000,000 and a capital charge of £756,000,000. I am going to take that into account, and that is about all that I shall do, so as not to fall under the censure of the Chair. Let us take what the right hon. Gentleman has done with his Protective duties, because they have become sheerly Protective within the last few days. The right hon. Gentleman made a real effort, I think, to make silk a purely revenue duty, without a taint of Protection, but in the last few days the pretence has gone It is now purely Protectionist, and, therefore, I treat both these duties as purely Protectionist duties. Now take the first. This is as bad a choice as he could have made, from every point of view, assuming he had made up his mind to become Protectionist, and I think he has. I am afraid we have lost him. Take what has happened over this. What is one of the most serious difficulties with which our trade is confronted now? [An HON. MEMBER: "Free Trade.'] That is not the case so far as export trade is concerned, and I am talking now of the export trade. Our greatest difficulty is this, that in consequence of our exchanges, the difficulties of the exchange in foreign countries, they can no longer buy our goods except at prohibitive prices. The result is that they are putting up factories in order to turn out the very goods they formerly bought from us.

That is undoubtedly one of the most serious factors with which we have to deal. [An HON. MEMBER: "Tariffs."] The condition of the exchanges is a much more serious factor than any tariff you could put up at the moment. How have are always got round that in the past, when we have found there is a tariff, and we have lost a particular trade? Our manufacturers are very resourceful, and always devise some new thing, cheaper, better, and more attractive, that creates a new demand, and then in those markets others cannot immediately compete with it, and we establish an absolutely new trade, which is very often more profitable than the old. That is exactly what was happening with regard to silk. We were circumnavigating the obstacles in the channel of trade by means of creating a new industry for a very fascinating, attractive fabric. It was not merely that we were making it cheaper, but these threads of silk woven in with our old fabrics made a very attractive thing to sell in other countries, and they were buying it—tassels, and things of that kind. The right hon. Gentleman has come in, and intervened in such a way that he himself admits—at least, his Financial Secretary to the Treasury does—that the production will be down by 20 per cent. What does it mean? It means that it will be more costly to produce. It will be, therefore, less accessible. It cannot penetrate into the markets in the same kind of way. It really looks as if the right hon. Gentleman were saying, "Ah, for an industry to be prosperous in times of depression is a luxury. Let us tax it." That is why I object to that first tax. [ Interruption, ] If the right hon. Gentleman says he did not say it, I accept it at once.

I said that the original Estimate was arrived at on the basis of a 20 per cent. reduction in consumption, but that we expect no such reduction under the scale which is now substituted.

It really does not interfere with my argument. It shows that when this was imposed first of all, the right hon. Gentleman was contemplating a reduction of 20 per cent. in production. He was not taking into account the state of trade and employment. Take the McKenna Duties. One result of removing the McKenna Duties was, undoubtedly, to lower the cost of the car. The manufacturers set themselves at once to cheapening production, and succeeded, because if you put to a manufacturer the choice between large profits in a good but a limited market, and smaller profits in a wider market, he will choose the first every time. Naturally, he makes a bigger income out of it. Therefore, the moment you removed the protective duties, and threw open the market here, they had at once to apply themselves to the problem of how to cheapen production. Without lowering wages, they managed to do it. What is the result? The export trade has gone up enormously since those duties were taken away by my right hon. Friend. What does that mean? More employment. Now the right hon. Gentleman goes back to the old days when there was every inducement to put up the price of cars. There, again, he has not considered the state of industry. The fact of the matter is, my right hon. Friend did not start with any sort of Protectionist Budget. He has been kicked into it by the interests. He fought a rearguard action very tenaciously, but he has given in. In fact, he really has discovered exactly what he himself predicted. He began with the Silk Duties, with just a sort of very faint suspicion of Protection. He has been driven, in the course of a very few weeks, into out-and-out Protection. What did he say himself?—

I will point out one or two other things. My right hon. Friend has examined, very incisively, the Death Duties from one point of view, and has pointed out some very glaring anomalies, especially in comparison with the Super-tax. I think they were very striking. I will take another aspect. What has the right hon. Gentleman done with the Death Duties? And here, I may say, I am an advocate rather of charges on Death Duties than on income. If I had to choose between the two I should have no hesitation. I am not going to enter into that argument now; that is not my point. What I am concerned with is the choice that the right hon. Gentleman has made of the estates he is to tax, and the estates he is letting off. The estates which he is taxing heavily, in the main, represent the capital and machinery of industry, that is, the estates between, say, £50,000 and £250,000. You will find in between those amounts most of the people who are engaged in trade, business and industry and the development of this country. He is adding to them 5 per cent. and 6 per cent., which, I believe, was more than Sir William Harcourt put on originally. When it comes to the estates beyond that, which, in the main, although not altogether, represent a mass of realised wealth, then he begins to dwindle. Down it goes from 6 to 3, and from 3 to 2, and, when the million comes, the inherited millions, the wind is tempered to the shorn lamb, and not a penny is added. I say that that is not from the point of view of considering what is best for industry. From the point of view of revenue, it is bad. If he looks at these figures, he will find that very nearly 40 per cent. of the estates of this kingdom are above the figure where he begins to tax, and when he comes on to the million, it is not far from one-third in those higher regions. Then he breaks off altogether; he does not add anything. [ Interruption. ] Yes, but the others were paying their shares before. The others at that time were paying an amount which every Chancellor of the Exchequer regarded at that time as a very fair position in the scale. The last was Mr. Bonar Law. It was his scale. Every scale that had been drafted and framed up to that time was a scale upon the ascending principle, and it is right, from the point of view of justice and fairness, and from the point of view of trade and business, that when you come to add on then, you ought to add on according to the same principle that every Chancellor of the Exchequer has adopted. You are hitting trade when you are putting it at these lower figures.

The next point is the way the right hon. Gentleman distributes his bounty. He does not seem to consider in the least there how he can best help industry. When you come to the smaller Income Tax payer, I think the concessions he makes are admirable, but when he gets beyond, he has the same peculiar tenderness for huge wealth. I will give him two examples. Take two men. One of them is a manufacturer at the present moment struggling very hard to avoid insolvency and entering the portals of the Bankruptcy Court. Let the right hon. Gentleman beware against opening those doors—that he does not open the door any further. The manufacturer is struggling hard. He has to pay upon the profits, not of this year, but upon the profits, perhaps, that he made a year or two years ago, while he is making nothing now. I am not making a criticism now of the three years' average, I am just pointing out the facts. He receives nothing, and he pays his Income Tax because he made profits last year or the year before. I want to put every point in favour of the right hon. Gentleman. Take, upon the other hand, the man who has from £50,000 to £100,000 a year of amassed, assured, invested wealth. He gets relief of from £1,700 to £3,000 a year. What is more, if he dies, his estate will have to pay no more. In regard to the first, his widow will have simply to find out of an overdrawn account an increased cheque of 6 per cent. to pay for the Death Duties upon his stock-in-trade. There is no justice, no fairness, no wisdom in that kind of dispensation of the powers possessed by the right hon. Gentleman.

As a matter of fact, the Super-tax payers can wait. As one who held the position of Chancellor of the Exchequer, I was glad for everybody who could pay. At the present time, however, in a time of great trade depression, as a matter of fact, the man who has to pay on £10,000, £15,000 £20,000 up to £100,000 per year ought to hold, with his fellows, a thanksgiving service at St. Paul's Cathedral—with other subsidiary services elsewhere—in order to thank God for their luck, and to pray that it should continue. But when you have 30 millions or 40 millions, or 26 millions a year, which you can dispense in bounty, and which you have made up to £40,000,000 by divers means, these are not the people that should receive the first consideration at the hands of the State; certainly, not at a time of great trade depression. I will tell the right hon. Gentleman one or two methods by which he could have helped industry, and I will put them very succinctly.

In the first place, he should have said to the Income Tax payer: "I will make an allowance in respect of wasting assets, in respect of repairs to machinery, and in respect to development." If he had made a reduction in respect of these things instead of this indiscriminate distribution, he would very considerably have helped trade and industry. [An HON. MEMBER: "It would have been a subsidy!"] To make a reduction in respect of what you spend in the repair of machinery, and in the development of your business is not a subsidy. It is what the Income Tax payers have been pleading for, with great justice, for a great many years. That would have helped trade. I will give a second method. Take the rates of this country. The rates of this country have gone up, have doubled in some districts, and in some they have quintupled. They have gone up in many industrial areas to over 20s. in the £. Everybody knows that they are interfering with the possibilities of recovery. My hon. Friend the Member for West Middlesbrough (Mr. T. Thomson) gave a very striking case the other day, I think it was from one of the great ironmasters in the Forth. This gentleman said that before the War the rates added something like 2s. 9d. in the £ to every ton of iron made. The amount now added is 21s. per ton. The same thing applies to some of the collieries in South Wales It is a very, very serious matter. It has meant the closing down of a great many of the collieries. If the right hon. Gentleman wanted to help industry he could have given a good part of this in relief of taxation instead of to the Super-tax payers. One of the most serious criticisms of his Budget is that he has pledged all his available resources, so far as I can see, that he cannot deal with this vital point.

Everyone knows, everyone who has anything like a long experience at the Treasury knows, that there is nothing more discouraging and nothing which causes more concern and anxiety to the people in the country, and more especially to the business people, than the heavy burden of taxation. There have been constant appeals to the Chancellor of the Exchequer to give relief to the taxpayer. What are the Government doing? They are introducing a Bill which is taking about £10,000,000 off a certain class of taxpayers—a deserving one—and by that process they are putting it on to others. The owners of house property are going to pay more. Agriculture will have to pay more as a result—because somebody has to pay it. If the right hon. Gentleman had thought of what was best for industry, he would have utilised some of his surplus in order to put through some great scheme of relief of local taxation. That would have helped trade more than anything he could possibly do. I am sorry for the right hon. Gentleman. He had a great opportunity with a considerable surplus which he inherited, and he has added to the burden of industry by imposing fresh taxation. He has not given the right relief when he could have done it. He is interfering with new and growing industries which have provided great employment. He has not considered in the least, in the framing of his scheme, the condition of trade and industry. That seems to be the ruling vice of the Budget, and I shall certainly vote against the Second Reading.

I am sorry that the right hon. Gentleman the Member for Colne Valley (Mr. Snowden) is unable to wait for one moment until we have the opportunity of answering some of the vituperation in which he certainly was not sparing. Certainly he has not adopted the usual courtesy given to opponents in this House in a matter of this sort. There was no measure in His vituperation contained in the words which he applied to the policy of the right hon. Gentleman and all this party. I admire his great gifts, but I sometimes think that on an occasion like this the right hon. Gentleman misuses those great gifts in order to embellish his remarks with acidulated acrimony. Then, we had from the right hon. Gentleman the Member for Carnarvon Boroughs (Mr. Lloyd George) a still more characteristic speech, in which we had some of those genial and somewhat vague observations which we sometimes hear from him. The right hon. Gentleman knows very well how to deal lightly and brightly with certain fiscal and financial questions, and he can do so on occasion with moderation. We all know that many of these financial difficulties are insuperable. The right hon. Gentleman, however, always finds out that his opponent of the moment has by some access of original sin been guilty of having misused all his opportunities, while at the same time having exaggerated all the old difficulties. So there is no way apparently out of the impasse.

I was struck with two peculiarities of the speeches to which we have listened. The speech of the right hon. Gentleman the Member for Colne Valley began and ended on the question of the wickedness of my right hon. Friend the Chancellor of the Exchequer in not having imposed again the tax upon land values. His speech began and his speech ended on that note. I was rather surprised, however, that the right hon. Gentleman the Member for Carnarvon Boroughs, who has had long experience of the land taxes, entirely avoided that question. Perhaps he was wise in refusing to recall the very unpleasant memories which he must retain of this abortive tax. But what was the chief accusation brought by the right hon. Gentleman against the Budget? It was that through the whole of this Budget runs the vice of Protection.

Protection and Tariff Reform never have been subjects which have greatly attracted me. I have always thought they were more a matter of bookkeeping than of high political principle, and that it was one to be decided by those best acquainted with the details by long experience. But standing somewhat aloof I have seen strange alterations of opinion in regard to these matters, on both sides of the House. And I would advise the right hon. Gentleman, the Member for Carnarvon Boroughs not to be too sure that his attitude towards some of those subjects may not undergo a similar transformation. I must, however, turn to an examination of the Budget apart from these speeches. We were told by the right hon. Gentleman the late Chancellor of the Exchequer that there was none even on this side of the House so poor as to do reverence to the Budget of my right hon. Friend. My history with regard to the right hon. Gentleman is not unknown. For 20 years I have sat opposite to him. We were seldom in the same Lobby. We had some acrimonious disputes, but throughout the whole of the time I have never ceased to admire his political genius and his political perspicacity. On the other hand I think he has regarded me with the indulgent if somewhat contemptuous toleration proper for the superannuated. Nevertheless I frankly say that I regard this Budget as a great triumph for the right hon. Gentleman. I believe in the long run that the results will be recognised by all, and acclaimed by the people of the country, and that its memory will live long. I am not going to touch upon the question of the Silk Duties or anything of that sort: still less am I going to dwell upon the hazardous and intricate question of the gold standard, nor to vie with the metaphysical discourses upon the subject to which we have been treated by the experts. Perhaps we owe them some gratitude, because they have often helped to restore our self-complacency by finding that the different experts generally concluded their speeches by proclaiming their rival experts to be under a delusion. I am going to touch upon only two points in the Budget, points which the right hon. Gentleman himself says are the twin and supreme objectives of national policy involved in the Budget; first, the help given to the resources which helps business enterprise by the reduction of taxation, and, second, the great effort to assure security for the industrial class. I will deal with the first of those first of all, because I am afraid it is surrounded by quicksands that may bring me into considerable difficulty with some of my hon. Friends opposite. I openly profess that I think the right hon. Gentleman was not only justified in reducing the Income Tax but was almost compelled to do it. I believe that it has brought relief where relief was greatly needed. I know that the humbly paid professional class, not the least deserving class, not the least hardworking, has got considerable relief from this boon. I am not ashamed to say—it is no use concealing it—that that is the class with which I am most closely connected, and with whom my sympathies lie, and I think that class may claim that it has not deserved badly of the country. The people of that class are not accustomed to broadcast their difficulties, but everyone knows that they have been, of late years, crushed between the upper and nether millstones of rising prices and constantly increasing taxes. They have held their tongues; they have borne it quietly, and I do not think anyone will grudge them this measure of relief. Coming to the Super-tax I do not quite understand whether the right hon. Gentleman the Member for Carnarvon Boroughs is altogether against touching the Super-tax or not?

I said I was in favour of postponing dealing with the Super-tax till better times arrive.

The reduction of the Super-tax will have a very good effect. It has probably passed from the recollection of the right hon. Gentleman that in 1909 I was the only Member of the House who, when he first proposed a Super-tax of 6d., ventured to move an Amendment. I was able to do so because I could not be supposed to have any personal interest in the matter. I was told by many Members on both sides of the House that they felt the same objections, that they did not accept all the right hon. Gentleman's arguments in favour of the Super-tax, but that they could not in view of their own personal interests accompany me into the Lobby against that tax. The right hon. Gentleman knows as well as I do that that was a tax with which the great financiers of 30 or 40 years ago would have nothing to do, and that Mr. Gladstone denounced it over and over again. I remember very well the speech in which the right hon. Gentleman introduced the Super-tax as a sixpenny tax. I ventured to prophesy that the 6d. would very soon grow, and I argued that if the object was to equalise the lot of all, then in the case of a man of £20,000 a year, compared with one in my own position, it must be not 6d. but 18s. or 19s. in the £ if it was to attain its object. I remember after that discussion, when my Amendment had been negatived, that I met in the Lobby a Member of the Labour party, for whose intellectual capacity I have the highest respect. He said to me, "You and I do not agree in many things. We do not agree about the Super-tax, but I agree with every argument you used in your speech. It is going to be our chief instrument hereafter, and, remember, I will not blench at the 19s. in the £." Those were the words of one who occupies a great and justly-achieved position in the Labour party. Does not the Super-tax, as he conceived it, come very close to that capital levy, which, when they were brought face to face with it, the Labour party did not venture to impose? I think the Chancellor of the Exchequer has not done badly in reducing this Super-tax.

I come now to the other feature of the Budget, the insurance scheme, and I make no apology for touching upon it after what was said by the right hon. Gentleman the Member for Carnarvon Boroughs. I am not going into discussion of the details of the widows' pension scheme, for that would be outside the scope of this discussion, but the scheme is, as the right hon. Gentleman said, one of the twin supreme objectives of national policy with which the Budget is concerned. I look upon that scheme as one offering great benefits to a large class of the community. What is it that the industrial class have suffered from most in the past? It has not been lack of money. The right hon. Gentleman the Member for Colne Valley estimated the national income at £4,000,000,000 a year. He put the income of Income Tax payers at £2,300,000,000, and I think the estimate was not an unfair one. The wages bill, which represents the real national income of the industrial class, must be about £1,500,000,000 a year at least. Take the value of that at 25 years' purchase, and one sees what an enormous sum is really and justly appropriated to the industrial class. They have not obtained the proper benefit from it, not because there is any narrowness in the pay rightly assigned to them, but because they have never had an opportunity of stabilising that right, or been in a position to make it an inheritance which their children and their children's children could benefit by, and that is what we have got in the contributory pensions scheme. I am not like the right hon. Gentleman the Member for Carnarvon Boroughs. I do not defend the contributory system simply on account of the financial necessities of the day. Were the money there, I would still say to my hon. and right hon. Friends opposite, "Let me beseech you to see some good in the contributory system." It is a system which gives people a feeling of independence, and that independence will give them a power and a dominance and a sense of inheriting a great stake in the country in a generation to come. I would ask the right hon. Gentleman to foster, to manure, to water, to build up the growth of that plant as much as possible by national assistance, and I feel hopeful that in a generation or two that plant which he has now set in the soil will grow till it is self-supporting. Let the House remember how shrewd business men have seen what an ocean of wealth there was in the insurance of the industrial class. They took the contributions of the people, and they gave fair returns, and yet at the same time they secured lavish dividends on their own investments. That ought to be put a stop to. These dividends will now go to swell the funds which will be in the possession of the people, and which will be their independent property. I ask hon. Members opposite to remember this before they go into the Lobby against this Budget, or carp at its provisions and what these provisions promise.

I would like to read to the House a few words from one who had the welfare of this country deeply at his heart and who had great political ideals. He said:

Those words were written 80 years ago by the great Leader of our party, Disraeli. It is 61 years since I, a stripling striving to enter the University of Oxford, heard the first great public speech to which I ever listened from his lips, and from that day till now his words have been my inspiration and his ideals have guided my political life. The rags of a senile sympathy are worth little to hon. Members opposite, but I would ask them not to look to us laggards on the stage, but to the younger men of our party, full of enthusiasm, full of zeal, full of ability, who are ready to co-operate with them in trying to raise the future of the class which they profess to represent. I would say to them, "Take the goods provided in this Budget; do not despise co-operation with those younger and zealous champions of our party because they will not adopt all your shibboleths and refuse to be bound by your schemes to destroy the present basis of our commercial system and substitute for it some fanciful and whimsical scheme." Do not refuse this contribution, or turn to a carping criticism of this Budget, calling it, as one of your leaders was not ashamed to say, a "fiendish deception," or turn round to the lugubrious prophecies of the right hon. Gentleman the Member for Carmarthen (Sir A. Mond) who laments the burdens which will be placed upon himself and his neighbours, and who thinks it is impossible for those burdens to be shouldered by the consumer. Let even the right hon. Gentleman the Member for Carmarthen —who makes long speeches and does not stay to listen to the replies made to them—take comfort because the Ministers have promised to take his hard case into consideration, and they Have undertaken that they would temper the wind to the shorn lamb as exemplified in the right hon. Member. These are not your allies; but you ought rather to seek them amongst those who, in spite of their differences from some of your economic fallacies, are eager to co-operate with you in carrying on the work of social amelioration, which this Budget ought greatly to promote.

I claim the indulgence of the Members of this House in rising to address it for the first time. Having received this opportunity from Mr. Speaker to say a few words in this Debate, I feel that I ought to express the point of view not only held by myself but those associated with hon. Members who sit on the Labour Benches. I want to refer with every respect to the Chancellor of the Exchequer and to those who are supporting this Bill. In the first place, I want to allude to the taxation which it is proposed to impose upon artificial and raw silk. It happens to be my privilege to represent one of the constituencies of Bradford, which I think will be well known to most hon. Members of this House as being at least a textile centre. It happens that only this morning, on calling at the Employment Exchange, I find that in our city, with regard to the textile industry itself, we are suffering under very great disabilities at the moment, and not less than 30,291 of our population are at this moment compelled to be unemployed. Out of that proportion we have not less than 5,000, and approximately 4,000 women, who are accustomed to the textile industry of our city. I can also put forward the opinion of other people connected with that industry in our district showing that there appears to be no possibility of any reason- able amount of trade being forthcoming which will materially affect the staple industry of our city.

The local Chamber of Commerce, along with the Manufacturers' Association, are looking with very disturbed feelings to the proposal of the Chancellor of the Exchequer for the imposition of a duty an artificial silk. We want the Chancellor of the Exchequer to remember, in spite of the modifications arrived at, that there is still a strong desire so far as we in Bradford are concerned that trade should not be hampered in this way, because that trade is not too good at the present time. The hon. Member for the Shipley Division (Mr. Mackinder) and the hon. and gallant Member for Leith (Captain W. Benn), when discussing this imposition upon these goods, tried to convey to the House that this proposal was going to interfere with a growing industry, and that point the ex-Chancellor of the Exchequer (Mr. Snowden) has made this afternoon in proposing the negation of this Finance Bill. I want to point out to the Chancellor of the Exchequer that at least the textile people of our City Chamber of Commerce, our Manufacturers' Association, and textile operatives are agreed that there should be no tax whatever on these goods, and that the duty should be removed in order to give them a chance of developing this industry in order to compensate for what we are losing with regard to our staple trade.

As one connected with that great consumers' movement in this country, the co-operative movement, I can say that we expected some further reduction in regard to the duty on tea. A comparison between what happened a year ago when we had a Labour Chancellor of the Exchequer and what is proposed to-day by a Tory Chancellor of the Exchequer certainly reveals a striking distinction. Last year at least an attempt was made to remove a great deal of the taxation which bore so heavily upon the masses of the people of this country. This Budget, as a matter of fact, gives relief to the rich classes, and it is attempting at the same time to carry forward a policy of refusing to face what is the most important part of the Budget, namely, the deadweight debt. The effect of that debt upon industry and upon everything connected with the social, industrial, and economic life of the people, certainly is proving a greater burden than ought to be borne.

Whilst the present Chancellor of the Exchequer is probably going forward to the position of trying to equalise the basis of taxation, or what he calls broadening the basis of taxation, I want to suggest the reason why we are in these difficult circumstances to-day, and why we are to some extent carrying this heavy burden of interest upon the National Debt and the great Debt itself of, approximately, £8,000,000,000. I am not comparing the figures of the right hon. Gentleman the Member for Carnarvon Boroughs (Mr. Lloyd George), which included the pension proposals and the cost of the housing scheme, but I am taking the figures contained in the statement issued by the Financial Secretary to the Treasury. When we take into account that young men and even middle-aged men during the War gave their lives in defence of their country, we find that there has been totalled up during their absence such an aggregation of debt that the history of this country has not seen before. I think we have a right to come to the Chancellor of the Exchequer of the day and ask him how it was that human life was so cheap and that money itself should be so dear?

I was reading some Budget speeches in the Library of this building only a few days ago. A financial statement was made by the right hon. Gentleman (Mr. Lloyd George) when he was Chancellor of the Exchequer, in November, 1914, and when he had to face the introduction of a Budget dealing with £400,000,000 or £450,000,000 of added taxation for that year, because the commencement of the Great War. In addressing this House on that occasion, the right hon. Gentleman made reference to the position which had obtained with regard to dealing with war finance at the close of the 18th or during the early part of the 19th century, and, speaking of the Napoleonic Wars of that particular period, he said that, at least, Mr. Pitt and the Chancellor of the Exchequer of that day attempted to deal with war finance, not on the lines dealt with during the time the War was raging in Europe and affecting the finances of this country, but on quite different lines, and they raised the revenue required for that period on the basis of 47 per cent. direct taxation and 53 per cent indirect taxation, thereby making sure that they were not piling up an aggregate debt in quite the same way as we have done during the past few years.

It seems strange to see Members of this House getting up and complaining about the heavy burdens on industry when they did not, when they had the opportunity, place those burdens on the shoulders of those best able to bear them. The right hon. Gentleman the Member for Carnarvon Boroughs, in 1914, shortly after the commencement of the Great War, when faced with the task of raising this money, stated to the House that they ought to secure by taxation the bulk of the revenue, if not all, that was required at that particular time, and he referred to Chancellors of the Exchequer of a hundred years ago and gloried in the fact that the right hon. Gentlemen of that period accepted their responsibility and made it easier for the common people of that particular day. He went further and said that if in 1914 Members of this House had risen to the heroic level of those ancestors, not only would they have financed the War without borrowing, but they would have been able through taxation to raise not only £450,000,000, but possibly £700,000,000. The important point to my mind was that he said finally with regard to that matter that we were in a better position at that particular period in 1914 to raise the money by taxation, instead of by borrowing, which was the policy finally adopted. I want to suggest that it was because of the lead given by the right hon. Gentleman the Member for Carnarvon Boroughs and those associated with him in dictating that the financial policy of this country was to be by borrowing and by raising huge loans instead of taxing the people who were in a position to pay at that particular period that this difficulty has arisen.

The ex-Chancellor has given some comparative figures with regard to the depletion suffered by the weekly wage earners as against those who were making profit out of the business and employment and so on. I view these figures in rather a different aspect from right hon. Gentlemen on the Front Bench. I take the total of the wage earners' depletion to be not less than £620,000,000, but I find that during the same period of years we had this strange fact that those who were in the position of making profits from business were in a much better position. I would like to refer the right hon. Gentleman opposite to the totals given in the Commissioners' Report of the Revenue Department. There they will find it states that instead of a huge depletion as applied to weekly wage earners, we had this striking situation, that those profit-making people and all those associated with them had increased their profits by £9,000,000, and had not suffered any depletion at all. I want to suggest to the Chancellor of the Exchequer that, even though we may be beaten in the Lobby this evening, we shall still hope that at least the right hon. Gentleman will take note of the appeals which have been made to him that he will seek to safeguard economy by the entire removal of the duties and taxation upon artificial and raw silk and so on, and that he will not seek in future to benefit the rich people of the country by giving them relief in taxation, but will rather seek, not only to revive the provisions of non-contributory pensions and so on, but to make sure that taxation on foodstuffs, and in other directions where it falls so heavily on the people, shall be removed as early as possible. I am obliged to the House for the indulgence with which it has listened to me.

We have listened to two important speeches this afternoon by representatives of the two Opposition parties in the House, each of whom, from his own point of view, has said the worst he could think of about the Budget proposals of the year. A month has gone by since the Budget was opened, and I must admit that it has been a month not at all destitute of occasions for the indulgence of the critical faculty; but, although criticisms have come from various quarters, and from very diverse quarters, those criticisms have been unrelated, contradictory, and, in many cases, mutually destructive, and, upon the whole—and it is upon the whole that you must judge these things—all those criticisms have been superficial in their character. Apart from party opposition, which is what one naturally expects—hon. and right hon. Members, returned here to distinguish themselves by saying the worst they can about our proposals, have exerted them- selves to the full, and will, no doubt, continue to do so—and apart from the hostility of certain well-known sections of the Capitalist Press, there are no signs that the Budget and the Budget policy are unpopular in the country, or that they have excited or encountered any deep tide of opposition. On the contrary, I think there has been a solid, silent, substantial preponderance of acceptance and support for the policy of the Budget throughout the whole of the country, and I believe that, before we reach the end of these discussions, which must necessarily occupy us all through the month of June, it will be seen that the proposals which have been made for the finance of the year not only commanded in their inception an adequate volume of support, but sustained it all through the period of criticism and cross-examination.

The first speech that we had this afternoon was from the late Chancellor of the Exchequer. A perverse destiny has seemed to brood over the right hon. Gentleman's career; all his life has been one long struggle to overcome the natural amiability of his character. I could not help thinking that there were some passages in his speech this afternoon where the process of self-mastery was almost complete. What a contrast the two sides of the right hon. Gentleman's character and political position present! On the one hand, we have the very careful, strict, orthodox, ex-Chancellor of the Exchequer, proud, and rightly proud, of the accuracy with which he has balanced his Budget, stern upholder of the strict repayment of debt, rebuker of the right hon. Gentleman the Member for Carmarthen (Sir A. Mond), who wishes to strengthen our international position by repudiating the gold standard and raiding the Sinking Fund. In sharp contrast to that view the right hon. Gentleman on his better side upholds the policy of most prompt, punctual and faithful fulfilment of all our obligations to the bondholders. And what is the other side? The other side is the Socialist politician, pledged to the nationalisation of all the means of production, distribution, and exchange, the apostle of class warfare, ranting against wealth, as he has ranted this afternoon, and exploiting the most pitiful prejudices of the street corner. Against the attack which he has delivered upon the policy of the Budget, I shall endeavour to set a few counter-considerations. [HON. MEMBERS: "Do!"] I will; and, as the ex-Chancellor of the Exchequer has just informed the House that I am the most valuable asset that the Labour party possess, I am sure hon. Gentlemen opposite will do me the courtesy of giving me an uninterrupted hearing.

What is it that the Budget has set out to do? I will explain lit with perfect frankness. My object was to make a real and effective reduction this year in the rate of direct taxes upon income. That was my object. I was led to believe, and I still believe, that upon the whole, in the circumstances of the situation in which we find ourselves, that is the best way in which an impetus and a stimulus can be given to the trading and producing energies of the country. I have yet to be convinced to the contrary. Very limited resources were at my disposal. The right hon. Gentleman gave away a great deal of taxation last year. He left the cupboard, not absolutely bare, but still far less well plenished than the one which he inherited from the Conservative Chancellor of the Exchequer who preceded him, and a heavy lag from his remissions of taxation has operated in the present year, so that the problem of giving real and substantial relief from the taxes upon income could only be solved in the manner in which I have endeavoured to solve it. I have succeeded, upon the whole, in giving a relief, taking the whole scale throughout, of nearly 1s. in the £ on the taxes on income; that is to say, if you take into consideration the reduction of the standard rate, the differentiation in favour of earned income, and the transference of £10,000,000 worth of taxation from Super-tax to Death Duties— if you take those three together, the effect may broadly be described as coming very nearly to a reduction of 1s. in the £ over the whole area, or almost the whole area, of individual Income Tax payers, except the very richest class, who do not get relief on that scale.

There are two questions which arise with regard to a policy of this kind. The first is, was this handling of our affairs required in the general interests of the country? On opposite sides of the House we differ as to this. I believe most firmly that the rate of direct taxation upon income was producing a chill and a check upon the enterprise and upon the con- ceiving energy of the country to an extent certainly far higher than in any other country in the world, and far more heavy in. its effect than in any other country in the world. Yet this country, where direct taxation has reached unprecedented and unparalleled dimensions, is also, we find, the country where, at the other end of the social scale, this extraordinary phenomenon of unemployment has manifested itself in the most distressing form. It is said by some that there is no connection between the two. The theory of hon. Gentlemen opposite is that, the more taxes you pile upon wealth, the greater will be the benefit to the working classes. Our theory is exactly the opposite, and we are prepared to confront you, not only with continuous argument on that subject, but we hope, having three or four years of power and authority, to confront you with the proved results of the opposite theory. That is the first question.

Now I ask—and it arises directly out of the right hon. Gentleman's speech— was this remission of direct taxation justified as between the direct and the indirect taxpayer? I know, of course, that this test is by no means a final one, but, over a long period of years, Chancellors of the Exchequer of every hue have been accustomed to refer to the balance between direct and indirect taxation, and to cast up their Budgets with some reference to that. I have never said, as the right hon. Gentleman has attributed to me, that I have the intention of getting back to the basis of 50/50. Such a thing is utterly inconceivable and impossible, and the right hon. Gentleman has no right whatever to invent such a saying, and then proceed to found a long and vehement and rather venomous argument upon it. It is so easy to found opposition upon such a basis, rather than by argument to try to deal with the real point and with what an opponent really means. It is a lower scale of performance to put words into his mouth which he never said, and attribute to him intentions which you know he never had, and then proceed to demolish his dispositions and hold him and 'his views up to execration.

Let us test this question whether this is a rich man's Budget or not, by some reference to the ratio between direct and indirect taxation. I think the figures will surprise the right hon. Gentleman. We will test it by seeing what are the rates of taxation. I have said quite clearly to the House that, following upon the great remissions of indirect taxation which the right hon. Gentleman made last year, I aimed this year at making an approximately equivalent remission to the direct taxpayer. The right hon. Gentleman took off £30,000,000 of indirect taxation and £4,000,000 of direct. I am imposing £4,000,000 of indirect taxation of a sumptuary and luxury kind, and I am relieving £29,000,000 of direct taxation. In a full year the right hon. Gentleman took off £32,500,000 of indirect taxation and £14,500,000 of direct, and in a full year I am proposing on balance— because the increased Imperial preferences slightly reduces the yield of the indirect taxes—£8,000,000 of indirect taxation, and I am relieving the direct taxpayer to the extent of £39,500,000. I think that is a fair balance on the two years, and I think, considering the very high proportion of direct taxation, unequalled in any other country in the world, it will be found to have been a sound, a necessary and a complementary adjustment of the Budget of the right hon. Gentleman last year.

But you cannot consider, as the right hon. Gentleman the Member for Carnarvon Boroughs (Mr. Lloyd George) said, this policy apart from the new pensions scheme. It is true that in the immediate year no burden is thrown on the Exchequer, but, as he has pointed out, in the general handling of the finance we shall have to assign to the new pensions scheme revenues. beginning next year with nearly £6,000,000, which rise in the tenth year to £16,000,000 and at their maximum reach £24,000,000, and which represent a present capital value of something like £750,000,000. You must take that into consideration in measuring the general financial and social policy of the Government. You are bound to take it into consideration. We consider that in this relief we are giving through the medium of an organised system of pensions for widows and the accelerated old age pensions at sixty-five, the aid we are giving, costing the sums I have mentioned, constitutes a far more effective way of helping bur people and will be much more appreciated by them than merely handing out dollops of relief off the indirect taxes on tea and sugar, as the right hon. Gentleman did. That is our view. Naturally he will not agree, but we are entitled to our opinion, and we believe that a far more salutary change will be produced in the life of the whole country by the development of the new pensions scheme and a greater sense of easement and security will be given than would have been the case if I had abolished the Tea Duty or made a further reduction in the duty on sugar. That is our view. This is no doubt a long controversy. It will go on for a long time, and we welcome it. We shall endeavour to show that it is far better than giving relief to indirect taxation to deal with exceptional cases of misfortune and weakness which occur throughout the country in regard to the masses of the people.

I take the second test—the yield to the revenue. I am on this question of the rich man's Budget. The year before the War the rate of taxation was 42·5 per cent. indirect and 57·5 per cent. direct, so in the course of the War a much larger proportion of the burden was assumed by the direct taxpayer. The right hon. Gentleman, when he came into office, found the following rate prevailing in the previous year, indirect taxation 36·54 per cent., direct 63·46. Then he introduced his Budget, the model Budget of the Socialist party—their first. He reduced indirect taxation to 33·9 and increased the ratio of direct taxation to 66.1. That was his proposal. I am dealing with the proposal he made to the House. Here was a proposal which the first Socialist Chancellor of the Exchequer made with the support of the whole of the Socialist party. What am I doing? He reduced indirect taxation to 33·9 per cent. and I have increased it to 34·06 per cent. He increased direct taxation to 66·1 and I have decreased it to 65·94. The difference is inappreciable. It is ·16, or less than one-sixth of 1 per cent. On this difference hangs, we are told, all the contrast between the noble, magnanimous, generous, democratic, far-seeing Budget of the first Socialist Chancellor of the Exchequer and the reactionary rich man's class proposals.

But that is not all, nor nearly all. The right hon. Gentleman spoke of the taxation of real and artificial silk, of motor cars and musical instruments, etc., as a real burden on the poor and the poorest of the poor. I do not wish to misquote him. I wrote the words down. He said:

Indirect taxation may be divided into two classes, taxes on sumptuary commodities—that is what a man or woman can do without, without any serious consequences—and those on necessary commodities. In the sumptuary we include alcohol, tobacco, entertainments, silk, motor cars, etc., and in the necessaries tea and sugar, etc. The percentage of tax revenue drawn by the late Chancellor of the Exchequer from necessary and basic comforts, as opposed to sumptuary commodities, was 5·08. My proportion is 4·86, so when we hear all this class prejudice poured out to try to disturb reasonable discussion of the national finances, it is fair to point out that the right hon. Gentleman exacted a larger proportion of his revenue from the basic comforts and necessaries of the poorer classes than we are doing in the present Budget. [ Interruption. ] This deals entirely with statistics which are published and are available year by year of the ratio of direct and indirect taxation and of the divisions between different classes of indirect taxation, which are quite well known and over which the right hon. Gentleman has no doubt for many hours pondered when he held the office I have the duty to fulfil. If we leave decimals and percentages—[HON. MEMBERS: "Hear, hear!"]—if we relieve the anxiety of the hon. Member by leaving these out—and come to simple block figures, we find they tell the same tale. The right hon. Gentleman proposed to take £432,000,000 from the direct taxpayer. I am taking £430,000,000 from the direct taxpayer. By collection, by insisting on punctual payment, and the calling up of arrears, and by the normal growth of these taxes, I am drawing almost exactly the same amount from what he would call wealth and what his friends would call the parasitic classes, as he drew in his Budget, which was the first word of the Socialist mission and message as applied to national finance. All this outcry and class prejudice are made to hang upon this petty, paltry difference of £2,000,000 a year, out of £432,000,000, in the amount contributed to the national revenue by the direct taxpayer.

I must say a word on the treatment of the Death Duties. I am told, first by the late Chancellor of the Exchequer, and now by my right hon. Friend the Member for Carnarvon Boroughs, that I have shown this extraordinary tenderness for the rich in allowing millionaires to escape from any addition to the Death Duties. The advice I tendered to the Cabinet did not arise out of this excessive tenderness for the susceptibilities of the very rich. It arose from certain quite definite reasons. The first was this. We were not carrying the Super-tax relief into that region at all—that is, we were not carrying special relief into that region—and, therefore, it was not necessary for the balance of my scheme to increase the Death Duties. But that was not the reason that really decided me. I am not going to be in the least afraid to discuss these matters with the party opposite. We do not take the view that wealth is a crime or that wealthy citizens are an injury or a weakness to the State. On the contrary, they are the most valuable aids and allies the Exchequer can possibly have. The rates upon these estates of over £1,000,000 vary from 30 per cent. to 40 per cent. They were increased to an enormous extent only six years ago by my right hon. Friend, who is now Foreign Secretary, when in the administration of the right hon. Gentleman the Member for Carnarvon Boroughs. For instance, whereas the rate on the smaller estates was raised by smaller percentages, the rate on an estate of £1,000,000 was raised from 20 per cent. to 30 per cent., the rate on an estate of £1,500,000 was raised from 20 per cent. to 35 per cent., and the rate on estates of over £2,000,000 was raised from 20 per cent. to 40 per cent. If you think that by proceeding upon that line you are going to get a more effective return to the revenue, it is not sufficient to reply that the individuals would be sufferers in their personal capacity. The question is entirely one of what Ministers think best for the accumulation of national wealth and the gathering of public revenue. Years ago—if I am making a misquotation I hope my right hon. Friend the Member for Colne Valley (Mr. Snowden) will correct me, because I have not been able to check his remarks—I think he said that in matters of taxation one should have regard not only to what is taken away, but to what is left.

I am glad to have that admission from the right hon. Gentleman, because I have searched in vain for that quotation. This is a point where you have to consider what is left, because beyond a certain point if you raise the rates to 30 per cent. and 40 per sent. and over, although you may get a lot of cheap cheers for teasing and harrowing the millionaire, which is a very popular thing to do, you will find that your taxation yield has fallen off.

That is true. It has certainly increased, but I doubt if it has increased in anything like the proportion that the tax was raised. If I thought we could raise money conveniently by that method, certainly it would be a question for this Government or any Government, but, as is well known, beyond a certain point of taxation you compel a division of these large estates. They are divided up, and then your taxation is not levied on these high estates to the extent of 30 per cent. or 40 per cent. You find yourselves confronted with five or six still very considerable but smaller estates in regard to which the individual expenditure on consumption is much greater, the fund for investment rises much more slowly, and your percentage of revenue might easily be halved. It is that reason which led me to take the view that I have taken. A very amusing American writer, who wrote under the name of Mr. Dooley, described the kind of policy of which the Socialist party are in favour, and I am not sure whether my right hon. Friend the Member for Carnarvon Boroughs (Mr. Lloyd George) does not come within the scope of this description of the policy of taking the poor man's money away from the millionaire and giving it to the plain rich.

Now I come to the Liberal Amendment I must say at the very outset that I fee! compelled to ask my right hon. Friend the Member for Carnarvon Boroughs a question, of which I have not given him private notice but which I have no doubt he will be able to answer. Did he take any part in drafting this Amendment! Did he approve of it? Was he consulted on the subject? Has he ever read it? I will not press him too far. At any rate, he moved it.

I did not move it. The right hon. Member for Colne Valley moved his Amendment.

Did the right hon. Member for Carmarthen (Sir A. Mond) see the Amendment before it was placed on the Order Paper? That Amendment contains one of the most gross and extraordinary jumbles of errors that I have ever seen put on the Order Paper of this House. What is the reason why I am to be condemned, why the Budget is to be rejected, and why the House is invited to oppose the Finance Bill? It is because, according to the Liberal Amendment, this Bill

"for the first time since the War imposes additional taxation."

That was the statement thrown out, I remember well, by the right hon. Member for Colne Valley, when the Budget was opened.

I thought the right hon. Gentleman said "since the War." What do you call "recent years?" At any rate, that statement was accepted quite lightheartedly by the Liberal party and it figures in their Amendment. What are the facts? The War ended in 1918. In 1920 my right hon. Friend the present Secretary of State for Foreign Affairs, under the direct guidance and strong encouragement of the right hon. Member for Carnarvon Boroughs, imposed the Corporation Profits Tax, increased the Excess Profits Duty from 40 per cent. to 60 per cent., increased the Beer Duty, and the Spirit Duty by nearly 50 per cent., put enormous taxes on wines and cigars, doubled some of the Stamp Duties, and so forth. He imposed taxes upon the taxpayers from which be expected something like £190,000,000 of extra revenue two years after the War had stopped. All these increases have completely passed out of the memory not only of my right hon. Friend the Member for Carnarvon Boroughs, but of the whole of his colleagues and friends. It shows that the wounds inflicted in our Budgetary controversies do not fester or rankle very long.

My right hon. Friend raised the rate of taxation per head of the population. The test on which to judge a Chancellor of the Exchequer and a Budget is that of the rate of taxation per head. Our population in increasing by something over 200,000 a year at the present time, and in spite of the fact that the population was increasing, the 1920 Budget raised the rate of taxation per head from £21 14s. 4d. to £22 0s. 8d. That is to say, it added 6s. 4d. to the burden of taxation per head of the population in this country. The right hon. Member for Carnarvon Boroughs, who was really responsible for it, has forgotten about it and he comes along and blames me. The Amendment of his party blames me for having been the first to inaugurate this evil departure. What is my crime? Let us see its dimensions. I have actually reduced the average rate of taxation per head of the population. The right hon. Member for Colne Valley wrung from the unfortunate inhabitants of Great Britain no less than £15 6s. 5d. per head in taxation. I have been able to alleviate their burden by reducing it to £15 5s. 9d. per head, a reduction of no less than 8d. I hope that before hon. and right hon. Members opposite go into the Lobby tonight against the Budget they will make it clear that one of the reasons actuating them is not that I am the first Chancellor of the Exchequer since the War to impose additional taxation.

Other topics are dealt with in both the Amendments. Reference is made to the onerous burden thrown upon industry by t riffs. The Liberal Amendment talks of a breach of the pledges of Ministers. That, of course, refers to the so-called McKenna Duties, the silk taxes, and possibly to the Hop Duty. Let me take the McKenna Duties first, and see whether industry is being hampered by these onerous burdens. A month has gone by since the Budget was introduced. Let us see whether the prediction about these onerous burdens hampering industry is justified by the event. My right hon. Friend the Member for Swansea West, in a recent Debate, drew us a most harrowing picture of the effect upon industry of the McKenna Duties. He said: Interruption. ] The Crossley Company say that they will be able in consequence of these Duties to resume their post-War programme which was seriously interrupted by the removal of the Duties. They announce 11 reductions in price. I will not read out all the reductions but take the Crossley 14 horse power car. That has been reduced from £436 to £395. The Rover Company say that they are considering large extensions of their factories, and hope in the next two years to employ 2,000 or 3,000 more workpeople.

The whole of the British motor trade is in active competition with one another and cutting down prices by this active competition. They are going to extend and they are making preparations for the production of cars on much larger scale. Therefore, there is no justification at all for expecting any general increase in prices. On the contrary, as far as things have gone up to the present, we see that all the evils foreseen by the right hon. Member for Swansea West (Mr. Runciman) have not only not taken place, but the opposite effect has already taken place. In regard to musical instruments, we know that new factories are being started and that great efforts are being made for the extension of the trade. I must be cautious at this point and make it quite clear that if you give to three or four special industries an advantage such as was given to them by the McKenna Duties, it does not by any means exhaust the question of whether that advantage would be equal if you extended it over the whole range, whether in consequence of that there would be a general rise in prices. I must make that quite clear as a point in my general argumentative position.

Now I come to the question of silk. I know more about silk now than I did when the Budget was introduced. The more I have learned the more convinced I have become of the excellence of this tax, the more sure I am that it will go through the House of Commons, the more sure I am that it will form a permanent part of the revenues of this country, and the more certain I am that when, perhaps after a long passage of time, hon. Members opposite are called upon to deal with affairs, that any Chancellor of the Exchequer will look long and carefully at the tax before he ventures to remove it. [An HON. MEMBER: "Wait and see!"] I will wait and. see. I am not the only person who may be called upon to do that. I will not misquote Mr. Asquith by using "Wait and see" in its dilatory sense, but I will use it in the minatory sense in which he used it.

7.0 P.M.

Let us look at silk. When the Budget was being framed, to preserve secrecy we limited our inquiries in the trade to a very few people. But the moment the Budget had been opened and the matter became public we were able to enter into discussion with every section of the trade who would place their advice and information at the disposal of the Treasury. That is exactly what we have done. That is what we always intended to do. We have had these conferences, and as a result very considerable concessions have been made and a very large measure of agreement has been attained—not unanimity, of course, one never would expect that, but a very large measure of agreement over every section of the trade has been obtained. It is quite true, so far as Lancashire is concerned, that there is still anxiety about the machinery of these duties and the feeling that they will hamper a great business in respect of a commodity which enters to a comparatively small extent into the composition of their products. The Manchester Chamber of Commerce are sending their representatives, not to join our conference on machinery, but to discuss with the officials of the Customs. I have every hope and confidence that we shall be able to convince them that this system of drawbacks not only compensates for but more than compensates for the evils and the inconvenience they think they would suffer owing to the duty, and that it will be quite possible to work it promptly and smoothly without throwing their trade into disarray. I have the greatest respect and admiration for the Lancashire cotton trade, in connection with which a great deal of my political life has been spent, but I must venture to say, with great respect to them, that in so far as the consumption of artificial silk is concerned they are not the only pebble on the beach. They only come fifth on the list. Yorkshire, Leicester and towns like Leek and Macclesfield consume more artificial silk than the whole of Lancashire. While I, with the utmost patience will do all in my power to disarm and allay any apprehension and to alleviate the burden—[ Interruption. ] Is that challenged? Does anyone challenge my statement? Here is the "Manchester Guardian Commercial Supplement"— surely I may quote that—of 21st May, 1925. I have not gone to 1909, in order to carry on a controversy! This is how the article begins:

When I first introduced the Budget, I stated that we estimated for a decline in consumption of 20 per cent. I think that was a very substantial allowance to make. It was only prudence to keep something in hand. Now we have had our negotiations with the trade and we know what they think and what their views are, and I am bound to say that my belief is that there will be no decline in consumption of artificial silk and very little reduction in consumption of natural silk next year. However, with the view of being quite on the safe side, I shall allow for a reduction of 10 per cent. in consumption. That is a conservative estimate, and I do not wish that to be understood as meaning or construed into an admission by me, or by the Government, that we contemplate a restriction in production. We do not. On the contrary. We know perfectly well that Messrs. Courtauld's have for a long time been rationing their customers. There is no question of production not being as great next year as it is this year. As to the British Celanese, another company in artificial silk, they are satisfied with the tax as at present put forward and are prepared to work it in a loyal manner. They expect an increased production. Over the whole area of the British Silk Association I am assured there will be more employment and a considerably larger manufactured output. Still, I take 10 per cent., and on that basis the loss to the revenue for these concessions is as follows: £500,000 in the present year and £900,000 in a full year. That makes the yield of the tax, as revised, £3,500,000 in the first year and £6,100,000 in a full year. It may well be that the yield will exceed these figures as the years pass. The whole of the yield of duty on artificial silk is undoubtedly going to extend and spread, and the revenue will grow with its growth and strengthen with its strength.

There is another criticism which has been made of the Budget, made first of all by the right hon. Gentleman for Swansea West, and it has been dwelt upon this afternoon by my hon. Friend the Member for Carnarvon Boroughs. It is this: "This is a rentier's Budget." That was his expression, I think. Really, my right hon. Friend will make a mistake if he supposes he is the only person in this House who understands a few French words. The word " rentier, " if I may say so—I may confess that I have refreshed my mind by consulting a dictionary—means stockholder, fundholder or annuitant. It does not mean simply the holder of Government stocks, not exclusively of Government stocks, but the holder or possessor of invested capital in comparatively non-speculative undertakings. How can you pretend that this Budget, with all its vices or all its virtues, is in any way designed to show special favour to that form of wealthy person, the rentier ?. It is a Budget which takes £7,000,000 and spends it on increasing the relief to the earned income in the smaller class of Income Tax payer, and leaves unrelieved the rentier class, if we are to use these foreign terms, in that smaller category. If my right hon. Friend had searched the whole vocabulary to find a word to abuse the Budget he could not have hit on a more unfortunate word than the word "rentier." I know what he did mean; he meant you are going to relieve the Income Tax of 6d. on the standard rate for all forms of Income Tax payer, and give certain other relief to various taxpayers, but those Income Tax payers who have to employ labour in large numbers will in the 4d. that they will have to pay under the new proposals lose all, or perhaps more than they will gain on the other. In that sense you are giving a relief to every class except to this class of industrial producers and employers of labour, who are a class—and I think there is a great deal of force in this, as has been emphasised by my right hon. Friend the Member for Hillhead in a series of able speeches—who at the present time are suffering in the most serious manner.

Well, I need scarcely say that this aspect has long engaged the earnest thought of His Majesty's Government, and when I originally submitted to my colleagues and to the Prime Minister the great and large finance of the new pension scheme I contemplated a provision by which a mitigation of the present heavy charge of unemployment during the temporary deficiency period, would form an essential feature. The matter was one of great uncertainty, because we cannot tell at what moment there will be an improvement or when unemployment will fall to 1,000,000 or to 900,000 and thereby the liability for the Exchequer appeared somewhat indefinite. We were considering from the very outset an abridgement of the deficiency period, as a complementary part of the new development of pensions. We decided, however, after deliberate consultation that it would be better to bring forward a pension scheme and to keep the second instalment of our proposals in reserve until we had an opportunity of surveying the general situation in the country and to have a further study of the problem. We have at this moment resources of help and power in reserve which at the proper time and before this Session ends will be moved forward to take their part in the general struggle we are waging against social disorganisation and the uncertainty of the workers' position. The key position turns upon the acceleration of the end of this deficiency period. At present the employers are paying l0d. and 11,000,000 workers are paying 9d. a week out of their wages. When, the deficiency period is ended the relief, both to employers and workers, will be extended to almost exactly the equivalent of the burdens which would be imposed by the new scheme. My right hon. Friend the Member for Carnarvon Boroughs advised us to increase the State contribution to the new pension scheme in the early years while this unemployed continues. I am sure that that would not be a thrifty bargain for the Exchequer. It is much better that any aid which we can give shall be applied to what is a temporary adverse condition rather than incorporated in expenditure which will continue to run for a greater period.

I shall ask the House to extend to us their confidence in this matter. I shall ask them to allow us to unfold our plans step by step and stage by stage in what we consider to be the best time. Meantime I may add a word of caution, to those who suppose that we are moving forward regardless of the effects on industry, and that we do not wish to give advantage and aid to those who are most heavily pressed by the present state of trade, because before the new scheme comes into operation declarations will be made which will reduce those grounds of objection to exceedingly small dimensions. Coming to general considerations, arising out of the general finances of the year, we are asked by the right hon. Gentleman the Member for West Swansea and various others in the country to postpone the application of the new pensions scheme, and the right hon. Gentleman advanced the argument, which I thought very curious as coming from the Leader of the Radical group, that if we put off the operation of our pensions scheme it will secure more votes for us at the next election. What a singular argument from a leader of Radical democracy.

There never was a Government which came into office less pledged in regard to social reform than the present Government. There never was a party which offered fewer electoral bribes to the constituencies, but for several years, for more than three years, the Prime Minister and a large portion of his supporters have been working steadily at this scheme for widows' pensions and earlier old age pensions. No guarantee was given at the Election that we would carry it out. It was sincerely desired and it was generally hoped for. Well, within a fortnight of assuming office we were engaged upon the shaping of this scheme. Why should we wait? How can we wait? Men are growing older every day and losing the benefits which they would get under this scheme. Men are dying, leaving their widows and their orphans unprovided for. Every day there are 6,000,000 wives who are dwelling in a position of complete jeopardy. When there is to hand a means of giving to some of those people a certain amount of assurance we have no intention of waiting, or of postponing the operation of this Measure. It comes into operation on the 4th January next, if the House of Commons supports the Government in their proposals, but when it is brought into operation there will also be in operation a further measure of relief which will mitigate to an important extent the extra burden which this throws upon the employers of labour and upon the workpeople over the area of 11,000,000 comprised within the ambit of the existing unemployment insurance scheme.

I have not time now to cover the ground as I could in these remarks in reply to the criticisms which have come from every quarter, but my Budget proposals have been carefully considered and carefully weighed, and we believe that they form a definite and integral scheme of finance. It may well be that they contain features which, as I said in my Budget speech, will excite criticism here and there from individual groups of members or classes, but taken as a whole we believe that they will inure to the. good of the country. We believe that, for instance, the Silk Tax will form a valuable and useful part of the revenue, without inflicting hardship on any single person. We believe that the relief of the Income Tax payers will tend gradually to the easement and solace of industry. We believe that the Imperial Preferences that are given will tend to foster the growth of inter-Imperial trade. We believe that the decision to revert to a gold standard, whatever doubts and difficulties may be expressed here and there at present, and whatever the temporary reactions, will, by the stability of a uniform widespread standard of value, be found to be of real service not only to the business people of this country, but to the manufacturing classes of this country, and, above all, to the working people, who are so ill-used and embarrassed with the constant fluctuations in wages and prices that occur. Lastly, we believe that this scheme of pensions and insurance which is associated with our finances, which I am very proud to have been able to link with the finances of this year, is going definitely to give a measure of security to millions of our fellow-countrymen who are haunted all the time at present by the fear of poverty and woe.

The Chancellor of the Exchequer at the close of his reply against the weakest points of the attack upon the Budget, brings a squadron of his light horse against a familiar argumentation of the right hon. Gentleman the Member for Colne Valley (Mr. Snowden) on this subject of direct and indirect taxation. The subject of direct and indirect taxation I believe to be of very secondary importance, in comparison with the real vital questions of the Budget. The position is such, the struggle for existence is so hard, and competition is so bitter, that if you relieve any national burden it will inure rapidly to the benefit of the country as a whole. It may not be so when times are better, but it is undoubtedly so when times are so bad as they are now. After throwing his squadron in that direction, the Chancellor turned to the line of attack which is being pressed by my right hon. Friend the Member for Carnarvon Boroughs (Mr. Lloyd George). His reply was in the form of a counter-attack. The counter-attack was not very serious. How is it possible for us to impress upon the Chancellor that lightly-quoted figures about the reduction of a few per cent. in the burden of taxation per head are no reply to the great anxiety of the nation when warnings are uttered in this House against the approaching peril of a fresh increase in the burdens of the nation?

I wish I could bring to the attention of the right hon. Gentleman these criticisms against his Budget which are the main criticisms with which I shall deal to-day. Perhaps I might put it in this way. Until recently it has been my lot to view with considerable detachment the Budgets of several other countries. I have sat by the bedside of their disordered financial systems, and I have prescribed remedies which were sometimes found efficacious and sometimes not. Returning to this country after the first heat of party clash in reference to the Budget, I have endeavoured to review its features and in something of the same spirt of detachment, and so I conducted a little inquiry from an entirely detached standpoint as it were into the present Budget, its defects, if any, and the remedies for those defects, and jotted down for my own benefit the results of my own inquiry.

When one makes such an inquiry from the outside into a Budget one asks oneself first is the size of the Budget a fit. Is it too big for the resources of the country or too small? To answer the question adequately you must look to the general financial position of the country. I shall certainly not weary the House to-night with a prolonged analysis. Let me jot down a few absolutely salient facts which seem to me to be important as bearing on our present financial condition. If you are trying to answer the question, "Is the Budget too big or too-small?" you can best express that by a comparison between now and pre-War days. We have consumed one third of our national wealth in the War. One can hardly realise what that figure means. Even France, with its terrible ravages, only consumed one-fifth of her whole national wealth, and America only one-tenth. Our national income figure has already been cut down to 15 per cent. less than it was before the War. The next most significant figure is that we are able now to save only 10 per cent. of our national income for reinvestment in fresh industry. Before the War we saved 25 per cent. That is getting straight to the heart of the industrial trouble of the times.

The next most significant figure is that the number of our effective customers in the world has been reduced by 200,000,000, as foreign competition has been increased by the new industries and new sources of production which were developed during the War by the new European nations, who are now securing new customers all over the world. Lastly, we have lost to the United States our position as controller of the world's credit. That great country has overtaken us and passed us, and is now the greatest market for credit, and, as we all know, trade follows credit. The great start which we got of 30 years in competition for the world's trade, by the enterprise, foresight and thrift of our ancestors at the beginning of the 19th century, is now lost, and we are now with others close competitors for the trade of the world. We are running level. In these circumstances, what is the comparative size of the Budget now and before the War? The right hon. Gentleman the Member for Carnarvon Boroughs (Mr. Lloyd George) has given the figures —£800,000,000 now and £200,000,000 then. Let me make one little refinement. You must allow for the rise in prices, 75 per cent., roughly, for the purpose of our mental arithmetic. Seventy-five per cent. allowance leaves you still with this figure to confront you, the central figure which should be in heavy type in the middle of the page—that our national burden in the Budget now is 2¼ times what it was before the War, and that our national income is 15 per cent. less. I draw from that the irresistible conclusion that we are carrying a burden which is too great, which I should have said was impossible were it not actually being borne, but which I know full well, and which every hon. Member knows, is incompatible with national prosperity.

Do you need any proof of this? You will find it in the state of trade. What is the most conspicuous effect? That we cannot compete, at present prices in this country, with foreign competitors. Every day brings a story of orders lost. Why are orders lost? Because the cost of production here is too high. What are the two principal contributors to the high cost of production? Scarce capital, because the employers and the capitalist class cannot provide it owing to the burden of direct taxation. What is the other principal contributor to the high cost? High wages—not too high in relation to the standard of living—in comparison with Continental countries, kept at their present high level by the burden of indirect taxation. Remedies are to be found for those evils in one thing— the reduction of the national burden. What do we ask ourselves next in this amateur enquiry? We ask ourselves next, "If that is the state, if it is so widely recognised by everyone that the burden must be reduced, what has been done about it in the past?"

Look at the history of the Budget in the last four or five years. What do we see? We see writ large this story—the story of a magnificent effort for the reduction of the national burden, but an effort which is now slackening and ceasing. Turn to the Revenue side. In the first four years since 1920 we reduced the revenue burden of the country by 43 percent. That was a wonderful achievement, an unparalleled achievement. The reduction was not fast enough. It may have seemed fast, but it should have gone faster. There were large surpluses left from year to year over expenditure, and those surpluses had to be used for the reduction of debt, imposing, as some of us think, an undue burden for the reduction of debt in those years, and unnecessarily hampering trade. Still the reduction went on, if not fast enough, and then came the fatal year of pause, when reduction stopped, and the tide turned; and this year for the first time we see an increase in the total burdens of the country.

It is no good the Chancellor of the Exchequer quoting figures of fractional falls, in giving comparisons of the burdens of the taxpayer. We are not speaking of that. We are talking of the total burden that falls on industry as a whole. When I hear £15 per head quoted with lightness of spirit, I confess that my only feeling is a sense of wonder that this country can now carry so enormous a burden of taxation and still maintain so much prosperity. Is there anything in the present state of affairs to justify a cessation of the reduction of our burden? Is there anything in the future outlook? I should say not. If one looks at the great staple industries of the country, at the cotton trade, the iron and steel trade, and above all at the coal trade, do we not see that this is the year in which employers, struggling for orders, are fighting closest the great battle of competition; do we not see that from the wage earner's point of view this is the time at which the struggle to maintain the standard of living, which they rightly struggle to maintain, is severer than it has ever been before? There is nothing in the present state of affairs to warrant a cessation of the effort to reduce burdens. What are the causes of that cessation? They are obvious. The history of the reduction of expenditure, the same history, a magnificent record of achievement. In the first three years expenditure reduced by no less than 63 per cent., and then the great national effort failing and dying away and the tide fatally turning. Two years ago it turned, and expenditure began to rise. It has arisen £10,000,000.

In my humble judgment there is only one line of criticism which should be heard upon a Finance Bill such as this. It is that a financial scheme which is based on the present conditions in this country, upon no realised economies, and which sees an actual increase in the burdens of the country, is not entitled to support. I shall not vote for the Labour party's Amendment. I do not think it is a veracious Amendment. I do not think it is possible to represent this Budget as a rich man's Budget, as against a poor man's Budget. My opinion is based on the view that relief from taxation, in the present condition of the country, steadily inures to the benefit of the whole country. But it is impossible to support a Budget which shows an increase in expenditure. The Chancellor of the Exchequer himself in his speech admitted that this was a disappointing aspect of his Budget. The concern which he showed on the matter, or which he showed in his original speech, if he has not shown it to-day, was a praiseworthy concern. He gave us one passage to read in his original speech which I confess I found a shocking passage. It did not shock me on behalf of the Chancellor of the Exchequer or on behalf of the Government. It shocked me on behalf of us as a nation. It is the passage in which he describes how the distractions of General Elections have for several years prevented Governments from getting down to the essential work of economy: Second Beading of this Bill is not entitled to support. What is the actual detailed scheme of economy which the Chancellor of the Exchequer put forward? What does it amount to? Is it the £5,000,000 on conversion? That is not a very large egg, and it is yet unhatched. True, the Treasury are extraordinarily able and skilful in extracting economies in interest on conversion. But let us recognise the exceptionally speculative element in economies on conversion at the present time. It is a new speculative element, due to the gold standard. If there should be a screwing up of money rates in order to protect our exchanges, and that should clash with the occasions of conversions, it might well disappoint all hopes of economy.

What is the other region of economy towards which the right hon. Gentleman pointed? There is to be, he hopes, an annual economy of £10,000,000 on Supply services. That bird also is Very much in the bush. How is it to be obtained? By a Committee of the Cabinet Such committees are not perfectly effectual economising instruments. On such committees it is only too natural that there should be a certain amount of the loyal attitude which is expressed in the phrase, "You refrain from scratching the face of my Estimates, and I will refrain from scratching the face of your Estimates." The right sort of committee to effect economies is a committee of one, with power to act. The constitution provides for such a committee. It is the Financial Secretary to the Treasury. It is his constitutional duty to present the Estimates, and to review expenditure. He has behind him, and literally, under his control, the most efficient weapon for economy, the Treasury staff. I would feel more confident, if instead of this work being entrusted to a Cabinet Committee, it was left constitutionally to the Financial Secretary to the Treasury. I say so with a greater confidence, because now these duties are in such extremely capable hands.

There is but one other immediate and urgent necessity for economy which I will mention. It is a financial reason which ought to be mentioned upon a Second Heading of the Finance Bill. Consider the sort of revenue which we have been sacrificing, which we have been cutting down since the great effort to reduce the burdens began. First we sacrificed ex- ceptional revenue. In the course of the last four years we have been sacrificing regular, ordinary Revenue. We have given away £200,000,000 of our standing Revenue from Income Tax, Super-tax, Corporation Profits Tax, Tea Duty, Sugar Duty and Entertainments Duty. That sum is not easily replaced. You cannot bring back that revenue with the same lightness of heart that was shown when you reduced the taxation. What would be the effect upon the country now, and in the course of the next year or two, if we increased the Income Tax and the Tea Duty? Such a step would have a disastrous psychological effect. We have been sacrificing and cutting down that standing revenue. The first, £120,000,000, it was quite safe to let go. I gravely apprehend that the sacrifice of the last £80,000,000 has cut very near the bone, and that it breeds troubles ahead.

Is the moral to draw from that that the revenue ought not to have been reduced? No, of course not; I have been arguing that it should be reduced. The moral is that it was unsafe to do it without equivalent reductions in expenditure. It has been carried too far. The effect of sacrificing this standing revenue is to commit us to inevitable bigger reductions in future than we need have encountered. We shall have to make good fast, and the faster because of the halt we have called in economics in the last few years. There are troubles ahead in the actual Budget itself. There are special receipts of £36,000,000, excess profits, and so on. They all have to be made good. I wish very much that now at last special receipts might be separated from' the whole Budget, that an actual balance might be struck and the special receipts brought in afterwards. It is a vanishing revenue, and its presence there as a result of the work of the Disposal Board, simply tends to conceal the financial position. Be that as it may, the important point is that we have cut our standing revenue down to the bone. There is this alternative before us—further economising, or an increase of our standing revenue. There is no question that the Income Tax and the Tea Duty will be decreased in the future, unless we make further large reductions in our expenditure.

Thus it is that the halt has been called. This is a Budget which confirms the halt. For the next two years there will be a vital necessity to get expenditure down. There is a better time coming. It is coming, most of all, because of the new spirit that you see in the country—the desire of labour and capital to co-operate, at any rate until the bad times are over. The realisation that though they may have their disputes it is necessary that they should join and co-operate, until foreign competition has once more been dealt with and reduced to reasonable dimensions. That is the new spirit in the country. The Government can help it or hinder it. They can help it by reducing expenditure; they can hinder it by allowing these burdens to continue, by inertia, by failure to comprehend the necessity. The time has not yet come when we can allow ourselves to slacken our efforts. It was Mr. Stand-fast who finally won through; Mr. Halt-by-the-Way never got to the Beautiful City at all.

It is with great deference, and also with a certain amount of trepidation that I venture to address the House for the first time, but I know I shall receive that indulgence, which the House always so generously accords to young Members in experience, if not in age. With your permission, Mr. Speaker, I propose to limit my remarks to Clause 8 of the Bill and to what I think may be the effects of that Clause in relation to the Empire as a whole. May I, at the outset, frankly confess to the House that I approach this question from the point of view of the unashamed Tariff Reformer, for if I am not wrong in my economic beliefs, it is not the imposition of duties or of their removal that is the fundamental factor in establishing the cost of goods to the consumer, but rather the elemental law of supply and demand. It therefore seems to me that a wisely thought-out scientific arrangement of tariffs will be a very useful instrument for the direction of trade and the stimulation of commerce which should tend to increase production and so bring down the cost of living. Were this not so, I, personally, would not support such a theory, for I realise full well that we in this country, in order to regain our one time prosperity, must never be handicapped by a high cost of living, which would have the effect of militating against our costs of production upon which our export trade depends.

To-day we are suffering from the impoverishment caused by the War, and as a result have not been able to find employment for upwards of 1,000,000 able-bodied persons. May I respectfully suggest to the House that the solution of this problem very largely depends upon our powers of Imperial organisation. Our Empire, the proudest heritage ever handed down to posterity, an Empire not created by violence, as some in this country would maintain, but by the earnest endeavour and labour of our forefathers, is crying out for development. Although I know the overseas Dominions and Colonies have many grave problems and difficulties at the present time, there is still virgin soil available for all those with the courage to go forth to these new fields which have such vast possibilities for the development and expansion of our race. During the last century we have increased our population in this country, roughly speaking, three times. Can we look forward in another hundred years to a like increase which would bring us to the appalling number of over 120,000,000 people huddled together within the confines of the United Kingdom—with three times the difficulties that present themselves at the present time in regard to the housing, clothing and feeding of our people. I know there are those who advocate the limitation of our population to the geographical boundaries of the United Kingdom, but I feel that if we should ever be foolish enough to adopt such a suicidal policy, it would sound the death knell of our civilisation and of our influence as a world power.

I fear I may be considered by many hon. Members to have departed from my subject, that of Imperial Preference, but to me the questions of Imperial Preference and of Imperial development go hand in hand, for is it not a fact that the Britisher is the greatest consumer of English manufactures, and is it not the case the more the Britisher produces in the Overseas Dominions, the more is he able to send to these shores and take from us in return? I do not wish to weary the House with figures, but I would like to draw attention to the fact that the New Zealander buys upwards of £16 of English goods per head. In Australia over £10 worth of English goods per head are bought, and in Canada just over £3. I have a word to say upon that matter on another occasion. In South Africa nearly £4 worth of English goods per head of the population are bought, while the German buys only 14s. 3d. per head, and the American only 10s. 6d. per head. Commerce is, like a great many other things in this world, a matter of barter. For years past the Overseas Dominions have been giving to England substantial preferences which amounted to some £12,000,000 in the last year, and in exchange England has had nothing to offer of this character; and so it seems to me that if the Dominions are not able to look for are expanding market for their products in the United Kingdom, they may be forced into other economic channels to the detriment of England's exports and the consequential detriment of our purchasing power.

Co-operation is the key-word of to-day. Co-operation and greater Empire commerce would bring the component parts of the Empire closer together. Whatever policy is necessary to secure this end, must emanate from the centre, from the heart of Empire and that is here in England. I sincerely trust it will be no party Measure because, the consolidation of our Empire is a task that calls for the best each one of us can give. I do not think it is even a national matter; it is rather an Empire question and were it possible to take a show of hands by referendum throughout the Empire, an overwhelming majority would be found in favour of a preferential system of trading, not only for the increase of material wealth, but also because it would be another means of bringing our kith and kin across the seas into closer touch with the Motherland. Let us not forget that the beginnings of our maritime supremacy were created within the protective scaffolding of our Navigation laws. Is it not possible that by a scaffolding of Imperial preference the component parts of the Empire may be brought closer together and that we may evolve into a great civilisation wherein not only will the greatest individual freedom be found but where the greatest freedom of trade may exist. I should like to say, as a Canadian and, above all, as a Britisher, that I view with some concern the increasing trade between Canada and the United States. For years past that trade has been increasing and for the last 25 years or more the United States have been looking towards Canada as the land from which they might be able to replenish their fast diminishing national resources. For the United States, I have the greatest admiration and regard, but I feel that our great systems of transport which were created for the east and west transit trade, with the idea of having a great imperial red route of commerce, should be encouraged; and I hope that through the preferential system included in this Bill our trade with the overseas Dominions will be developed and enlarged to the mutual advantage of all concerned.

New Zealand, Australia and South Africa have all expressed their desire for closer economic union through the medium of Imperial Preference. Only Canada has refrained from pressing this point during the Imperial Conferences of recent years, and this is to be explained, I think, by the fact that since the late Sir Wilfred Laurier, that great Canadian patriot and Imperialist made advances for closer economic union 15 years ago—advances which were rejected by the then English Government—the Canadian Government has refrained from re-opening the question. I am, however, satisfied that the preferences included in this Bill will be taken by the great body of Canadian people as a gesture from the Motherland towards the closer economic union of the Empire. It is for these reasons that I whole-heartedly support the principles embodied in Clause 8 of the Bill, believing as I do that they will help to bring back this country and the Empire as a whole to the high road of peace and prosperity again.

8.0 P.M.

As a comparatively old Member of this House, I have no hesitation in complimenting the hon. and gallant Member for Taunton (Lieut.-Colonel Gault) upon his maiden speech. It requires considerable courage in a young Member of this House to address it for the first time. I speak from my own experience, but while not at all agreeing with the views advocated by the hon. and gallant Member, I am sure the manner in which he has expressed those views commended itself to the House, as it did to me. His speech carried with it at least a note of conviction and an earnestness in the manner of delivery, and in that respect it has some resemblance to the speech of the right hon. Gentleman the Chancellor of the Exchequer. As I listened to the right hon. Gentleman to-day, my mind went back to the speech which he made in opening the Budget—a speech during which I sat and listened and wondered. I heard the right hon. Gentleman, cheered by hon. Members behind him, laying down principles and propaganda which long before the establishment of the official Labour party were preached in the highways and byways by myself and my colleagues to our considerable personal danger. They were considered heresy at that time, and only a few years ago were still considered heresy by hon. Members on the benches opposite, but for 25 years the Labour party officially have had them upon their programme. As I listened, I said: "Surely this is a case where the mantle of Elijah has fallen on worthy shoulders." I hoped that some of the promises and suggestions would be realised, but it was not long before I was convinced that the right hon. Gentleman had not waited for the mantle to fall on his shoulders, but that he had surreptitiously climbed over the back wall and purloined it from the wardrobe of the ex-Chancellor of the Exchequer. That was admitted, on the evidence of the Attorney-General, his own colleague. Even then I was hopeful that he would carry the mantle gracefully, but so convinced was the right hon. Gentleman himself of the unfitness of the mantle, that he cut a big chunk off it, and passed it over to his colleague the Minister of Health. I am not one of those who believe that he has altogether burnt his boats. I have known him for over 30 years, and his conversion to many of the points illustrated in his Budget speech is no sudden growth. Over 19 years ago we met in the drawing room of a noble lady, who herself was convinced of the efficacy of Socialism, where he collaborated with myself with H. H. Hyndman, Keir Hardie, H. Quelch, and all the other alleged disreputable characters of that time. He then absolutely subscribed to the policy of the taxation of land values that has been enunciated on these benches, and I am not convinced that he has burnt his boats, in spite of all his sins of commission and omission. [An HON. MEMBER: "He has burnt yours."] No, I am still afloat. There is an old adage which says, "If you will show me your company, I will tell you what you are," but I am afraid that in this case there is a difficulty with the right hon. Gentleman. I was in some hopes that out of all this, good might come, and I have not altogether lost hope yet, because the speech of the hon. and gallant Member for Taunton (Lieut.-Colonel Gault) is only an evidence that there is a spirit rising up, even in the Conservative party, that will urge the right hon. Gentleman and others like him in the right direction. I agree with the hon. and gallant Member for Taunton. I hope this question will not remain a strictly party question. I do not care from what quarter it comes, so long as it is in the right direction of the uplift of the class to which I belong, and to which I am proud to belong.

Let me take a short survey of the right hon. Gentleman's proposals. First of all, we had the gold standard. Personally, I am not much concerned about that, because the only possession that I have of the days of gold is a single souvenir, which, if it will get him out of his troubles, I will gladly pass over to the right hon. Gentleman at any time. I am not much concerned about that, but I am concerned about this, that I hoped that the relief to the small Income Tax payer would be of considerable advantage to hundreds of thousands of working men. I call myself a representative working man, and, speaking from my own personal experience, it certainly was a considerable relief to me on the face of it, but may I point out that, while it puts money into one pocket, it takes it out of another? For instance, most of us have domestic companions, whose pleasing fripperies we admire as much as they themselves, but I would like to ask the Financial Secretary to the Treasury, what does it profit a man if, what he gains on the Income Tax swings, he loses on the camisole roundabouts? If you take 6d. off the Income Tax and put 1s. 6d. on stockings and camisoles, I do not see where the advantage comes in.

There is one point which I hope the right hon. Gentleman will consider, because it affects me and the men whom I represent, and that is that there has been an iniquitous system introduced in the last few years of the quarterly assessment to Income Tax. The quarterly assessment means that men, instead of being assessed yearly, are assessed quarterly. I represent a section of men who are not permanently, but casually, employed at the docks, and these men are assessed quarterly. The first quarter may be a lean quarter and they might not earn sufficient to pay their way, in which case they have to get into debt and get the grocer and the greengrocer and so on to trust them until the following quarter. The second quarter may be a fat quarter, but what a man earns in the second, good quarter of the year is used up in paying off the debts of the bad quarter, and the mischief is that he is not assessed in the good quarter. The third quarter of the year may be a lean one again, and the demand for payment comes in the third quarter, when the man is between the upper and the nether millstones of a bad quarter in the beginning and a bad third quarter, and his earnings in the second quarter have gone to pay his debts of the first quarter. I have had case after case brought to me where warrants have been issued for these men, and where a judgment has been secured against them, and, were it not for the humanity and common sense of the local tax collector, who, after all, is only human, with all that is said against him, they would have had to go to gaol for something for which they were not responsible. I hope, therefore, the right hon. Gentleman will take that point into consideration and be able to assure me that this iniquitous system will be abolished altogether.

What system would the hon. Gentleman prefer? I understand he does not like our proposal to collect the tax from wage-earners half-yearly. Would he tell us what is his proposal?

My proposal would be that there should be no quarterly or half-yearly assessment, but that the earnings of the full year might be taken, and consideration given also to the nature of the amount and the earnings of the year in which the demand is made. If something of that kind were done, it would be more satisfactory, but, personally, I do not see why this collection of Income Tax from the ordinary casual labourer ought to be in existence at all. Really, the game is not worth the candle. Over and over again I have been assured by officials that it takes more to collect the arrears of these men than the money amounts to when it is collected. I wish to draw a comparison between the relief given to the small Income Tax payers and that accorded by the shifting of the burden of the Super-tax to the Death Duties. If anybody can afford to pay, surely it is the man with over £5,000 a year, and why should he be relieved while men on a lower scale of Income Tax have to bear this burden? It is no use saying that the removal of 6d. is going to be a great relief, because while this tax on women's underwear goes on, it is simply a case, as I say, of losing on the roundabouts what you gain on the swings. I know that a dead man cannot take it with him, and the conditions attendant upon crossing the Rubicon may make it impossible to negotiate an insurance policy, because you do not know what will happen on the other side, but it seems to me that the relief to the small Income Tax payer is altogether inadequate as compared with the relief given to men on the higher scales. It is playing it rather low down, as they say, to pinch the coppers from a dead man's eyes, and in that respect I do not think the Chancellor of the Exchequer is dealing fairly with the two sections of the Income Tax payers.

In regard to the McKenna Duties, I wish to make an open confession. I am not a particularly avowed Free Trader, neither am I a particularly avowed Protectionist. As has been said often on these benches, I do not think any of these suggestions will solve the problem of unemployment; it lies deeper than that. On the face of it, this system may appear to relieve a trade here and there, but, as the fable says, what is fun for those who throw stones is death for those who receive them. You may relieve a trade, but it is very questionable whether it is effective or not, because, after all, the consumer pays every time. Take the interests that I represent. The suggestion is that a protective tariff—and they are protective tariffs. It is no use burking the question, for putting a tariff on goods to safeguard an industry means that the only way to safeguard the industry is to keep the goods out. If the goods come in, and pay the tariff, there is no safeguarding of the industry, and, therefore, there is no difference. If the goods are kept out altogether by a prohibitive tariff, what becomes of the transport, which is our staple industry? So that, again, what you gain on the swings you more than lose on the roundabouts.

I desire to say one or two words in respect to new sources of revenue. It has been mentioned here that there are sources of revenue altogether untouched. That is quite true. My right hon. Friend the ex-Chancellor of the Exchequer has suggested a true source of revenue—the taxation of land values. I know this subject is supposed to be thrashed threadbare, but it is none the less true. Let me give one or two cases in point. In Liverpool to-day there is land the value of which is one guinea a square foot. I think the rateable value is £4,000,000 per year, and all that value has been created by the joint industry of the employers and workmen, the shipowners, seamen, firemen, the officers of the ships and the dock labourers. Why should we levy the burden of Imperial and local taxation on these and let go scot free the man who does nothing to create anything? The House will remember the old lines which are well adapted to this case— were used to build some of the Louses, and some actually to build a place of worship, and, it is alleged, the bell that tolled the men to execution is the same bell that rings in the congregation when they worship God and sing praises to Him "from whom all blessings flow." I could give case after case of this kind, where docks or factories have been built, and the local people are taxed millions of pounds a year for creating something, while the man whose property has been enhanced sits idly by and absolutely escapes scot-free. If you relieve municipalities from local taxation, you would relieve industry, inasmuch as the employer, who is so heavily taxed, would be relieved of some of that taxation, and the money thus saved would go into industry.

I wish the right hon. Gentleman would go back to his old love, the taxation of land values, because I am convinced we have in that a great source of revenue. There is, in my opinion, one blot on the right hon. Gentleman's escutcheon, and that is that he has made his vaulting ambition his king. He worships it He has put it on a pedestal. Personally, so far as the social reforms he has suggested are concerned, I have no hesitation in wishing him God-speed, but, like the historic cardinal, he may yet have to say:

I propose to confine my remarks to the subject of the artificial silk taxes. As a representative of Lancashire, I heard with some amazement the statement of the ex-Chancellor of the Exchequer that artificial silk had been the salvation of that county during the last three or four years. . So far as the county itself is concerned, none of us has any knowledge of that. It has been suggested that the duty would cause a restriction on consumption of 20 per cent., and that that would be a blow at the cotton trade; but those who are in that trade are not sure that artificial silk has been an unmixed blessing to the trade. It has not supplemented the trade so much as supplanted certain sections. Before the introduction of artificial silks, there was a very considerable trade in what are called mercerised yarns. Mills have in many cases ceased to produce these particular yarns. The manufacturers have looms standing idle, because they could not turn over from the production of the mercerised goods to the production of the artificial silk goods, and it is held by many people in Lancashire that, even if you were to have a reduction in the consumption of artificial silk, it would not be altogether detrimental to the trade of Lancashire.

What is the position of opinion in Lancashire on this question now? Under the Budget there are two burdens which interest the manufacturers of Lancashire. There is the burden imposed by the extra payments under the pensions. There is this burden on artificial silk, and it is the opinion of a great many people that the organisations in Lancashire are striving at a gnat and swallowing a camel in this connection. The burdens from the pensions fall upon the whole of the industry, whereas there are only engaged in artificial silk production, on the most liberal allowance, 4 per cent. of the looms of Lancashire. Now we have this singular fact, that the cotton trade organisations are having their meetings of protest, are sending their deputations to London, seeking interviews with the Chancellor of the Exchequer, and having an extensive propaganda in the Press, in order that 4 per cent. of their members may be benefited, while they have made no protest against the imposition of this extra burden which affects the 100 per cent. Whether the burden be 4 per cent. or 100 per cent., the cotton trade is hardly in a position to look with equanimity even upon any additional burden. There are in these proposals for artificial silk duties matters which give very grave consideration to those in the trade. The rebates, so far as we can judge, will have to be characterised by the most generous consideration from the Customs, otherwise there will be the greatest dislocation of the industry.

How is that consideration to be given? I have had the privilege of taking part, along with other Members, in discussing the matter with the Chancellor of the Exchequer, when we were promised that there would be the greatest consideration shown, and that the trade should not in any way be hampered. I would have liked this afternoon the Chancellor of" the Exchequer to have gone into more details as to how he is going to meet the particular difficulties of the export trade in mixed cotton and artificial silk goods, and how the rebates on these are going to be conceded. He has promised to us through his officials that rebates will be granted and paid week by week. That, of course, if carried out, will be a most important concession, and will give great relief to the industry. But we want to be sure that what is promised in a room at the Treasury is going to be carried out through a promise in this House, and in actual practice when the duties are put on.

Another point about which we have considerable difficulty is what is to happen when urgent orders are to be packed and sent away. There again, there is a promise that a declaration by the responsible exporter will be taken, and that the goods shall not in any way be held up. But it is essential that we in this trade should have most definite pledges, and clear understandings of how these pledges are to be carried out. There is another matter which is even of greater importance from the trade point of view. It is the point which I have put before the Chancellor of the Exchequer. I put it first before the Lancashire Members, and afterwards before the right hon. Gentleman—that is the question of the serious handicap which is going to be placed upon British trade by the imposition of the duties and the allowances of rebate. When the manufacturer exports his goods, say, to America or to the Dominions, he has to declare the home consumption value of the commodity. For instance, his commodity going to America, say, will have a reduction if it contains four or five pounds of silk, of 7s. or 8s. on the piece, the value of the piece being 150s. But the American system is the same system which is in our Colonies—that a duty must he paid, not on the value at the port of importation, but on the value of the commodity in the country of export. Therefore our price in America will be 7s. or 8s. less than the home consumption value here. That would cause an imposition by America and by the Colonies of a duty of from 40 per cent. to 70 per cent. upon the 8s. You there have a condition penalising British goods to the extent of 4s. or 5s. per piece. It would mean, instead of encouraging trade, that pieces of Lancashire cotton goods mixed with artificial silk which landed in America would have to be quoted against pieces from France and other countries where they have not to pay an Excise duty. I want to know, and Lancashire is anxious to know, from the Chancellor of the Exchequer how he proposes to meet this difficulty. We do not feel that the new condition as it is now laid down is satisfactory to Lancashire trade. We are convinced that on these lines the right hon. Gentleman cannot carry on successfully. In view of this I have been in consultation over the week end with many of the Lancashire manufacturers.

We should like to put up an alternative proposal to the Chancellor of the Exchequer. It is admitted that the cost of production in this country is increased by not less than 10 per cent. owing to the rates and taxes. Instead of bothering with excise, instead of being troubled with declarations and rebates, if the Chancellor would strike out Excise duty and impose a duty of 5 per cent. on the yarn which comes into the country and 10 per cent. upon the manufactured goods which come into the country—not for Protection, but merely that they should be placed more on a level with British-produced goods—we should get rid of this difficulty about the overseas trade. We should also be removing the Protection which exists in favour of the foreigner against the Britisher for goods placed on the London or Manchester market. If the Chancellor of the Exchequer thinks that there is something acceptable here, and he would be willing to let these proposals come before the traders of Lancashire, Yorkshire, and the Midland counties as to which of these two schemes—one with the simple import revenue duty with no encumbrances about it, or this cumber some system of excise and rebate—I am quite sure that so far as the Lancashire section of the trade is concerned there would be support to the alternative proposal.

In conclusion, I should like to draw the attention of the House to the very significant fact in connection with the resolutions which have come from the Lancashire cotton trade. They have shown, for the first time since the Corn Laws, that where you have proposed import duties on manufactures and import duties on certain raw materials, you have the entire omission of any pro test from Lancashire against the duty upon such manufactured goods. If you seek the cause, it shows the change which has taken place in Lancashire feeling. It has taken place by the great difference in taxation now compared with pre-War times. The conditions to-day are so dissimilar to what they were. In view of the taxation on our industries being so much higher than that of any foreign country, the imposition of a revenue duty of 5 per cent. on semi-manufactured and 10 per cent. on manufactured goods would be nothing but a measure of justice to Lancashire manufacturers. I trust the Financial Secretary to the Treasury will give some attention to this question, because on these lines he will find that the cotton trade of Lancashire can be worked far better than by Excise duties.

It may be, as the Chancellor of the Exchequer boasts, that he can take into the Lobby a very large majority against the Amendment moved from these benches, but, judging by the last speech, a good many Members will go into the Lobby in defence of the Budget with a large amount of trepidation. There is still a large amount of uncertainty in the minds of hon. Members from Lancashire and Yorkshire, and knowing the Manchester district, I can well understand that; but I am not going to discuss particularly the issue as between Tariff Reform and Free Trade. To a very large extent those questions leave me indifferent and cold. From all quarters of the House we are getting gloomy pictures, unrelieved almost by a single gleam of hope, of the state of our trade and the condition of the mass of our people. When I hear Members in all parts of the House, and particularly on the Liberal Benches, talking about the condition of our people, and bewailing the measure of Protection contained in this Budget, I cannot help reflecting that we have had 80 years of Free Trade in this country, and that at the end of that time we find ourselves in the condition in which we are at the present moment. I know it may be urged that the War left us confronted with exceptional circumstances; but even then the fact remains that Free Trade has not helped us to overcome the conditions left by the War, and to raise ourselves into a more favourable position.

The right hon. Gentleman the Member for Carnarvon Boroughs (Mr. Lloyd George) has reminded us that owing to the depreciation of her currency Germany has been able, practically, to wipe out her national debt and her municipal debt. On more than one occasion lately he has put before the House the position of the people of this country, burdened with its huge debt, but it must be remembered that he was the head of a Government which might have done something to deal with that question. He is one of the men responsible for the economic conditions which have emerged from the War. The right hon. Member for Norwich (Mr. Hilton Young), who was concerned with him in that Government, has been discussing this afternoon the possibility of small economies. I submit that the day of small economies is past. The position is desperate, and if it is to be dealt with by means of a Budget far more drastic remedies will have to be employed than any 1 have heard suggested from the Liberal Benches. In face of the difference between a national debt of £150,000,000 in Germany and our own national debt of £7,000,000,000, and the practically entire absence of municipal debt in Germany as compared with our own municipal debt of £160,000,000, small, tinkering economies in various departments or even economies amounting to a few millions in the naval, military and air services, are not going to be effective quickly enough to save the situation.

When did our downfall begin? I am one of those who has been opposed to the return to the gold standard. In my opinion, deflation in this country took place far too rapidly, and I think that what has been done recently in this Budget will have a further adverse effect on the great mass of the working people. If I am correctly informed, the establishment of the gold standard is already having an adverse effect on the steel trade, as it has placed our competitors in that industry in a more favourable position than we are. I represent a constituency in which the steel trade is one of the dominant industries, and I very much regret that any further handicap has been placed on that industry, which must affect it adversely so far as the markets of the world are concerned. This policy of deflation was begun when the right hon. Gentleman the Member for Carnarvon Boroughs was at the head of the Government, and, if I am correctly informed, it was done in consultation with some of the gentlemen in America who at the present time have guaranteed the credits that may be required under the return to the gold standard. I have already pointed out that when this policy of deflation was entered on the statesmen of this country ought to have had the wit and wisdom to use the economic tendencies of their time and to take good care that deflation did not leave us high and dry with a huge burden of debt round our necks, which has been increased in volume by the very process of deflation. That is one of the problems which I have never heard anyone in the House, except from these Benches, discuss from the practical point of dealing with it effectively and drastically. I am one of those who believe that the trade and industry of this country cannot permanently carry a burden of £350,000,000 a year for interest alone. It must come from the wealth produced in the country, and I do not believe that in competition with our competitors on the Continent, assisted as they have been by the economic clauses of the various settlements that have taken place, our trade and industry can maintain itself, and gave our working people a decent and comfortable standard of living, so long as it is hampered by this huge burden of interest. It is a question which must be dealt with quickly, and no tinkering with small economies can get us out of our difficulties while that problem remains untouched.

I want next to deal with the vexed question of how we are raising revenue under this Budget. The Chancellor of the Exchequer dealt severely with my right hon. Friend the Member for Colne Valley (Mr. Snowden) for his animadversions upon the holders of excessive wealth and the arguments he used in favour of retaining certain taxation. With much heat the Chancellor of the Exchequer declared that wealth was not a crime. None of us say that wealth is a crime. Everybody on these benches desires increased production of wealth in this country, but we desire to see that wealth distributed something like equitably. I represent a constituency which has been very badly hit by the slump in the steel and coal industry. A few weeks ago I was in the town of Merthyr and the people lined the streets and there was a procession which went up the main street. Three or four years ago those people would have looked fairly comfortable and fairly well clad and fed, but my heart was sick as I passed through those streets at the sights that met my eyes. Here were hard-working, decent men and women, the latter in particular being clad in tattered garments with white haggard faces showing signs of want and poverty, and a constant struggle against economic difficulties. There were thousands of breadwinners who had been out of work month after month, year after year, some of them for two years and some of them for three years.

The Chancellor of the Exchequer says that excessive wealth is not a crime. Wealth may not be a crime, but the presence of millionaires at one end of the social scale, while these conditions exist in my constituency at the other end of the scale is a crime against the moral humanity of all of us. We on these benches say that if there is to be taxation it must be placed upon the shoulders of those who are best able to bear it. What are the facts of the case 1 No Chancellor of the Exchequer has been able to keep pace with the increase in the aggregate amount of wealth owned and controlled by comparatively few people in the community. From the time the Super-tax was introduced it has increased from 6d. up to the figure at which it now stands, but not once since its introduction has any Chancellor of the Exchequer been able to keep pace with the enormous increase that has taken place. The amount received from Super-tax in 1920 was £42,405,000. In 1921 it was £55,669,000; in 1922 it was £61,730,000; in 1923—and this figure only applies to Great Britain and Northern Ireland—it increased to £64,209,000; in 1924 it was £61,746,000; 1925, £72,680,000, and last year it was £63,300,000.

The Chancellor of the Exchequer in his own White Paper estimated that if the Super-tax had been retained where it was during the last 12 months, the increase he would have derived would have been over £70,000,000. The Super-tax is based round about 5s. 6d. in the pound, and it takes one-third of this vast amount of wealth. In that case the Chancellor of the Exchequer estimated himself that the incomes of a relatively few people who are called upon to pay Super-tax has increased by over £21,000,000, and these few people, whose incomes in the past 12 months have gone up by over £20,000,000, are the very people who are to receive a remission of tax so far a this Budget is concerned. What is the, number of people who are liable to pay this Super-tax? In 1911, when it was first introduced, the number of persons paying Super-tax was 10,287. In 1912–13 it rose to 11,800. In 1916, after two years of war, the number of persons paying Super-tax jumped up to 34,400. In 1918–19 it rose to 43,802. In 1922–23 the number of persons paying Super-tax, after six years of poverty and bad trade, after years of abnormal unemployment and increasing poverty and misery for the mass of the people, had increased to 84,589. In that year it was shown that 137 persons paid tax on incomes amounting to a total of £26,621,000.

I mean that in view of these figures which have been taken from official sources, there is no ground whatever for the Chancellor of the Exchequer in any sense attempting to lighten the taxation of persons claiming such a tremendous amount of increase out of the totality of wealth produced in this country, and yet we hear wailings that something must be done to get capital for reinvestment. The right hon. Member for Norwich talked as if industries were languishing because there was a lack of capital for investment. Where are the industries lacking capital? Where are there any capital issues which are not fully taken up immediately? Let anyone offer an investment at 6 per cent., and capital goes mad, and if the interest is 85 per cent., frenzy sets in on the Stock Exchange. When Austria offers 12 per cent. and Germany offers high rates there is plenty of capital to be found in this country for those countries. There is much talk of sympathy for the Colonies and cementing the bonds of Empire, and preference, but let Australia come and offer 5 per cent. interest for a loan, and let our late enemy, Germany, offer 6, 7 or 8 per cent. for a loan—Germany will get money from this country to re-establish her industries and our brothers across the sea who helped to forge the links of Empire will languish in vain for the capital they require to set their industries on a stable foundation. So much for the argument used by hon. Members, and they leave me very cold indeed.

In a previous Debate I referred to this as a Park Lane Budget, and hon. Gentlemen opposite resented the imputation or the argument that there is anything like class prejudice so far as this Budget is concerned. I should be surprised if it were not so. I have been trained in a school that believes that each class looks after itself when it has the opportunity. That is one of the reasons why I am here. My class believe it is about time they began to look after themselves, and I think so too. I am convinced that they are not looking after themselves by having a majority on those benches, as this Budget proves. I believe that this Budget proves up to the hilt that the Conservative party can look after its friends, and always does, in season and out of season. I am convinced that this Budget is proof positive of the statement that the rich can always look after themselves. They will do anything for the poor—they will extend sympathy to them in all their needs, they will do anything for them, as Tolstoy said, except get off their backs. That is the last thing that will happen so far as the rich people of this country are concerned.

I have no hope that anything we on these benches can say or do will affect the issue, but the people in the country will have something to say and something to do about the issues raised by this present Budget. I agree with the right hon. Gentleman the Member for Colne Valley that it is a present to us so far as our propaganda work is concerned, and, let there be no mistake, we will use it to the best of our endeavour, and we have some power to do so. We know how to use these opportunities; we are not behindhand when propaganda comes to be made. We may lack a Press, but we have a very effective platform, and we can use it, and we propose to use it.

I do not want to detain the House very much longer. I am not here for the purpose of discussing, as I have said, the merits or demerits of Free Trade as against Tariff Reform. I stand for a form of Protection that will not be accepted by the Government Bench. I would keep out of this country all goods not produced under fair conditions. I would not put a tax on them, but would keep them out entirely. It is not, however, a question whether you will be able to do that or not; it is not a question even of being able to prevent goods produced under unfair conditions from coming in. Your great competitor, Germany, under fair conditions, can beat the manufacturers of this country in the markets.

We are not going to be beaten, in this race with Germany, by workmen who receive sweated wages, or even work long hours. We have to meet a superior organisation, a superior technical education, a superior economic system. That superior economic system can only be met effectively by bringing our own economic system into something like line with it. That means wiping out the huge burden of debt that now rests upon our people like a tremendous incubus. Call it what you will, call it a Capital Levy, hate it as you may, but sooner or later, to save your industry and your trade, you will have to accept some such conditions. I do not believe that there is any escape. I believe that only when the character of the burden is realised, only when the weight of the incubus is realised, only when some statesman will come along who is big enough and courageous enough to face the issue, will the trade of our country recover, and our workpeople he placed upon a footing whereby they can earn for themselves and their families the decencies and comfort that their energies and their work deserve.

9.0 P.M.

I do not propose to take up the time of the House for more than a very few moments, as I am quite aware of the disabilities under which this House suffers owing to the promiscuous speaking of honourable inconspicuous Members. Whether we look upon this Budget as a delicately adjusted system of balances, or as a fortuitous conglomeration of uncompensating errors—it depends on which side of the House we sit—il think most of us will find that there are one or two points in it that we should wish to see modified I would refer to the question of Death Duties. I have the honour to represent an agricultural constituency, and I would like to urge upon the Chan- cellor of Exchequer how very heavily these duties fall upon agriculture, and how their effects are so much more disastrous on this industry than on any other. Our finance is framed to the basis of an industrial community, and no account JS taken of the fact that the economic and social conditions of the countryside are quite different from those of the town. In the fluctuating opportunities of wealth in business, these Death Duties do not do a great amount of harm, but to the stable conditions of rural life they are very nearly fatal. A rich man leaves stocks and shares, and a certain amount can be sold without damage being done, but the ordinary country landowner usually has very little except his land, which is an agricultural unit, so that to sell a portion of it depreciates the value of the whole, and makes it so much the less efficient as an agricultural unit.

I submit that these duties, though they may be necessary, are really the worst and the most inequitable duties that we have. They fall in some instances seldom, in some instances often, and with all the more crushing severity, and in a manner which makes it impossible to calculate their occurrence. Provision during lifetime is often impossible, and in any case only further depletes the notoriously low income from agricultural capital, and the amount available for yearly upkeep. I would very strongly urge that the Chancellor of the Exchequer should give consideration to a scheme under which agricultural estates which pass in the direct line may be relieved in some measure of these Duties, and that this may form part of the investigation into agriculture which we have been promised.

If these Death Duties are analysed, it is seen at once that they are nothing more than the putting into practice of the principle of the Capital Levy. Death Duties are taken from the savings of the individual; they are his private capital, and they form a part of the national capital, and on the death of such a man a levy is made on this national capital.

This country is against the principle of the Capital Levy. You have only to put it on the platform to see at once how averse from it the country is. But by these Death Duties we have tolerated this Capital Levy system for some years, and I think the reason is that in some measure the wind is tempered to the shorn lamb, in that he is only shorn after he is dead. That makes any complaint about this form of taxation necessarily an anticipatory one; it is in the nature of crying out before one is hurt, and, therefore, it does not receive a great deal of weight. In order to receive due consideration, the complaint must be made after the patient is dead—a circumstance which very seriously militates against any such complaint being received.

I have always felt—and I have ascribed these aspirations to the Chancellor of the Exchequer also—that as the nation's representative, he should be most scrupulous that his type of finance has all the attributes of Caesar's wife and be above suspicion; and just as we hope the State will show itself as the model employer, we should like the right hon. Gentleman to present himself as the model financier. But what do we find? How does he propose to deal with these monies, which are capital? He proposes to spend them as income and he proposes to do no more than follow the wretched example handed down to him by former profligate Chancellors, if I may use such an epithet to such a highly respectable body of right hon. Gentlemen. I think the only legitimate way in which the proceeds of these duties could be applied should be for the redemption of the National Debt, or for any other proper heading of capital expenditure. To use them as income is a rake's progress, it would meet with a great deal of criticism in ordinary life as to that extent it impoverishes the nation's capital.

It may be said this is no more than customary, but custom ought not to excuse it. Custom cannot stale the iniquity of outraging a principle, and the continuous violation of a principle in no way depreciates the value of that principle or makes it any the less one to be upheld. It may be said these sums which come from the Death Duties are needed. It is as broad as it is long. The Chancellor now takes a certain amount of revenue and uses it for the redemption of the National Debt. Let him change the breadth for the length. Let him take these sums and use them as revenue and earmark the proceeds of the Death Duties for the redemption of the National Debt to the amount required by the Sinking Fund. In that way, although we confiscate, we should confiscate correctly and we should give the satisfaction to rich men who die that, at any rate, they are dying in an orthodox manner, all correct and according to Cocker, and we should not increase their sorrows in parting by inflicting what, if they are economic purists, must be this additional sting to death. We are standing on a slippery slope in these matters, therefore, it is all the more necessary that we do not countenance in any way these rash and inexpedient schemes of confiscation which are so unthinkingly put before the country. The Chancellor of the Exchequer has never been afraid of precedent. I would ask him not to be bound down by the example of his predecessors. He has for some time given us the heartening spectacle of himself broadening down from precedent to precedent. I would urge him to let him broaden himself a little more and make yet another. If I have not moved him, as is not unlikely, I would finally appeal to him in his capacity as the jealous custodian of the spotless and impeccable purity of our national finance.

May I preface what I have to say by a word of congratulation on the able speech delivered by the hon. and gallant Gentleman who has just sat down. I represented for a great many years an agricultural constituency, and I know full well the value of the point he raises. The remarks I have to make come from a central opposition which I may describe as "somewhere between the devil and the deep sea ". I leave it to the House to imagine which is the devil and which the deep sea. A few weeks ago I indicated that I and a few Friends on this side of the House were ready to give broad-minded consideration to the Budget and broad assent and support. Nothing to my mind has transpired to make me waver in the continuance of my support of the Budget as a whole. It has been suggested that the pension scheme is in no way involved in a vote given for the Second Reading of the Finance Bill, but I submit that the pension scheme and the broad provisions of the Bill are so closely interwoven that they cannot be separated, and to vote against this Second Reading is to show a lack of appreciation and support of the great pensions scheme with which it is involved. The right hon. Gentleman the Member for Carnarvon Boroughs (Mr. Lloyd George) himself to-day intimated that that was a section of the Bill which obtained his hearty-support, and that given me increased strength in the position I occupy. I intimated a few weeks ago that the few Friends I represent maintained their independence on any detail they felt inclined to treat separately. They have shown that, some in voting against the McKenna Duties, and I think all of them in voting against the silk duties. I took upon myself the responsibility of voting for the silk duties, and I am prepared to defend that attitude now.

Three weeks ago it was quite obvious, from the way in which the scales were arranged in connection with both artificial and natural silk, that the great arguments between Free Trade and Protection were not involved. The Excise counter-balanced quite comfortably the import duties. Since then there has been some alterations. The alteration from the strictly Free Trade point of view I can quite perceive makes one regard them a great deal more narrowly, and to regard them narrowly may be said to reduce the opportunity of taking part in a great effort of social reconstruction. I shall be more lenient than that type of Free Trader and I shall judge this tax by three broad tests. If I thought the duties as they now stand would either alter prices or reduce employment or put the industry to sleep, as tariffs are supposed to do, I should be very much inclined to oppose them. I do not think either of these three fears will be borne out. If you take the question of putting the industry to sleep, in other words of making it inefficient behind a tariff wall, certainly from what we hear and see in the Press there is no indication that any of the big companies involved in the industry have any fear about the future. I see it has the support of both the British Celanese Company and also of the Silk Association as a whole. If it is suggested that prices will rise under the effect of these new scales of duties I can only draw attention to what was said by the right. hon. Gentleman the Member for Colne Valley (Mr. Snowden) before the alteration, that he hardly thought the price of stockings will increase by 3d. a pair. I do not see any reason to expect unemployment as the result of these duties. As we have to raise £800,000,000 from somewhere it seems proper to have chosen an article which can only be described as either a luxury or a semi-luxury.

We were warned a few weeks ago by experts, including ex-Chancellors of the Exchequer, that a return to the gold standard would have the effect of driving gold out of the country. The reverse has been slightly the effect. I see also that the bank rate, which we were told would rise, has remained unaltered. Taxation, generally, with the broad arguments for and against indirect and direct taxation, has been so much covered this afternoon, and I think so admirably covered by the Chancellor of the Exchequer, that I do not propose to waste the time of the House on that subject. All I would say in that connection is, that the complaints from the Labour party that it is a rich man's Budget have been completely stilled by the complaint from the industrialists, and as it is impossible to be true both ways, I am inclined to think that the answer is somewhere in between these two points of view. It is a Budget raised with reasonable fairness from a great many sections of the community, and I believe that when the storm blows over no one will be much the worse but the Exchequer will be much the richer.

I must deal with the Liberal Amendment. In voting for the Finance Bill this evening, I find my task made considerably easier by the impossibility of voting either for the Liberal Amendment or for the Socialist Amendment. The Socialist Amendment, quite simply, states that it is a rich man's Budget. I disagree with that, and therefore I find it quite easy to vote against it. Broadly speaking, the backbone of the Socialist Amendment is that it is a rich man's Budget at the expense of the poor man. That is how I read the Socialist Amendment. I oppose the Amendment because I do not believe that allegation to be true. It is not very difficult to oppose the Liberal Amendment, more particularly for two specific reasons. One reason was brought to the notice of the House this afternoon, that it is inaccurate in its first three lines in so far as it states that this is the first time that fresh taxation has been imposed since the War, and the second reason is supplied in the last line but one, which goes so far as to say that it I shall show the fallacy of that remark. Another part of the Liberal Amendment states that there is increased expenditure upon armaments. I admit that to be true, but I do think it very dangerous for those of us who cannot possibly know as well as the advisers of the Grown to say, on so narrow a margin of a few millions exactly what you would drop and with what you should go forward. That is the old argument, I admit, of trusting to the experts, and if that does not carry enough weight I would supplement it with the further suggestion that armaments to-day are very largely the subject of international agreement. There have been in the last two or three years several developments, such as the League of Nations discussions, and in the last few weeks the German Pact proposals, all of which, if watched and regarded with patience, will lead to far bigger schemes of armament reduction than a mere reduction of £2,000,000 on this Budget or a couple of millions in some other way.

Therefore, for the moment, it is very ill-advised for us to press this point too hard. I could, if I had the freedom, press for a reduction in naval construction on the grounds that we are building at the moment against our best friend. I am a great believer in the value of Anglo-American friendship, and I can see no possibility whatsoever, even now or in the future, of our going to war or ever wanting to go to war with that great continent across the sea. If the naval experts could be got off the subject to-day of the necessity of building against that great country, we might effect enormous economies in that way. I believe that the development of an understanding between ourselves and America is perhaps the most hopeful thing both for economy and for the peace of the world.

Dealing with the Liberal Amendment in its reference to widows' pensions, it makes a statement and expresses two desires. The authors of the Amendment make a statement that there is no State contribution, although this afternoon it was admitted practically by one Member of that party, the right hon. Member for Carnarvon Boroughs, that from now the Government accepts liability for a large State contribution and does, in fact, next year commence to make it. I, therefore, submit that the statement in the Liberal Amendment that the State makes no contribution is merely splitting hairs. The Amendment also says that the pension scheme should be non-contributory, and at the same time it favours reduction in taxation. How can you have it both ways? If you have a non-contributory scheme, you not only fail to get reduced taxation, but if you look at the figures you will find that you will add to the taxation of the country by forcing upon the State in five years £31,000,000 and in 40 years £66,000,000, in addition to the State contribution proposed under the Budget. Therefore, these two points in the Liberal Amendment, one that the scheme of pensions should be on a non-contributory basis, and the further point disapproving of the Budget because there is no reduction in taxation, seem to me to be rather contradictory.

The Budget, generally, has met, as the Chancellor of the Exchequer said, with much less disapproval than some people thought. It is easy to criticise. Some people may say that the pension scheme should have been postponed. Some people may say that there should have been a greater relief of industry than has been granted. Others may say that artificial silk should have been exempted from taxation. Strong language has been used, and it is because strong language has been used that I would draw attention to the sort of thing that would have happened if in this Budget any one of these things had been left out. The pension scheme has been described by the right hon. Member for Shettleston (Mr. Wheatley) as a fraud. He used other words to make it a better sentence, but his assertion comes to that. What would he have said if there had been no widows pension scheme in the Budget? Would he not have said that this Government, composed of rich, powerful representatives, had failed to meet the obligations and the promises by which it had got itself into power? It seems to me that criticism having come from the extremes, from those who want more taxation and those who want less, from those who described it as a rich man's Budget and those who claim it to be an anti-industry Budget, the answer is probably in the middle and somewhere in between. What we want to get at, is how best to help the country as a whole.

All schemes of social reform demand sacrifices from the rich and special efforts from the workers. I think this is a bold Budget and a Budget of promises redeemed.

I confess that I take part in this Debate without very much enthusiasm, because I find myself in the somewhat difficult position of opposing my own Minister. That is not a thing that I should care to make a practice of doing. The Chancellor of the Exchequer will forgive me, because he understands how deeply I feel about this question of the taxes on artificial silk, and he knows that I view it as one of the most serious matters which has threatened my county of Lancashire for many years. It is because of that and because I must put my county first that I find myself in the unpleasant position of opposing my Minister.

I shall confine my remarks entirely to the question of the taxes on artificial silk and the consequences of those taxes upon the material used in Lancashire and Yorkshire. In the first place, I would say that the amended proposals as published in the Finance Bill in no way whatever meet the difficulties of Lancashire. The Chancellor of the Exchequer spoke this afternoon of the support he is receiving since these amended proposals were brought forward. That support, as is very plainly seen from the Press, is an extremely qualified support. Many of those who at the meeting with the Chancellor of the Exchequer last week apparently gave their support, are already attempting some form of withdrawal? And from whom did this support come? In the first place, the support has come from the artificial silk producers. No Member of this House need have any anxiety whatever with regard to the position of the artificial silk producers. The artificial silk producers are perfectly able to look after themselves. They are absolutely sure of their profits, whether we have this tax or whether we do not. The only difference is that if you do not have this tax the artificial silk producers have got the whole world as their market, and if you do have this tax the artificial silk producers become monopolists and can do just what they please. That is one support the Chancellor has relied on.

Another support comes from the real silk users. I would like hon. Members who are not conversant with this matter to appreciate the fact that real silk has nothing in common with artificial silk except one thing, its lustre. The real silk users have given their support. They have agitated for years for out-and-out Protection. Therefore the real silk users welcome these proposals. One thing that is, perhaps, apt to mislead the House is the suggestion that the Silk Association has given its support to the Chancellor. Hon. Members who are not conversant with the matter judge that if the Silk Association gives its support, that is sufficient for anybody else. The Silk Association does not represent the views or opinions in any degree of the artificial silk users either of Lancashire, Yorkshire, Leek—

As far as Leek is concerned, I understand that the Leek manufacturers are entirely supporting.

I am very glad of that interruption, because it enables me to point out that if my hon. Friend will look at last Friday's Press he will see that the Silk Association quite definitely stated that it did not speak for the users of artificial silk. What I say is that the great county of Lancashire, for which I am speaking, and, if my hon. Friends will allow me to say so, of Yorkshire, are held in bondage in this matter to the artificial silk producers, to the real silk users, and to the Chancellor of the Exchequer. What is the position of the great industry of our county in the matter? Why do they raise these objections? I am extremely sorry that I have to question statements that the Chancellor made this afternoon. He is entirely in the hands of those from whom he gets his information, but he said that Lancashire and Yorkshire did not consume as much artificial silk as Leek and Macclesfield. Lancashire consumes 25 per cent. more artificial silk than Leek and Macclesfield put together. These are facts that I am quite ready to put before the Chancellor, if he wishes. Further, we claim in Lancashire that this is a developing industry. We have had it only three or four years, that is all. If you take the index figure of 100 as a basis of Lancashire consumption in the first three months of 1923, in the first three months of this year, it was 730. That is an increased con- sumption of artificial silk in Lancashire of seven and a half times. It would have been greater, but as the manufacturers themselves admit, supplies were not sufficient, and as the Chancellor himself admitted, the home producers could not produce enough. Despite those facts, he is going to limit our opportunity for obtaining raw material from overseas. We shall be unable to have any of the raw material produced on the Continent introduced into this country.

Another point I want to make for Lancashire and Yorkshire is that every pound of artificial silk used in those counties represents a much greater value in the finished article. The artificial silk used in Lancashire or Yorkshire is only a fraction of the total Value, which represents an enormous export trade for this country, far more than that of Leek or Macclesfield, when the artificial silk is used in its condensed form. Again, what about the employment in Lancashire as compared with these other towns? There is no comparison between the two.

Lancashire makes two main objections. First of all, the objection to a 3s. import duty on the raw material. May I point out here that there seems to be a little difference of opinion as to whether the amended import duty under the Finance Bill is 3s. or 2s. The Manchester Chamber of Commerce, in a circular issued this morning, referred to it as 2s. I say the Manchester Chamber of Commerce is wrong, and that the import duty on the raw material as used by the Lancashire manufacturers will be 3s. That is one thing to which they object. Another is that it makes the home producer into a monopolist; he can simply play with Lancashire as he wishes. The third thing to which they object is the Excise Duty, not only because it will add to the cost, but because the Excise Duty, as a matter of fact, by the time it reaches the home consumer is not 1s., but nearer 2s. 6d. Lancashire principally objects to the Excise Duty because of the vicious system it entails of rebates or drawbacks. That is one of the great difficulties with which Lancashire is faced. In Lancashire they say that this rebate system is impossible to work because of the differences of our trade from any other trade. We have had comparisons made with the rebates and how they work in regard to sugar taxes or tobacco taxes, and it is asked, "Why cannot they work in the cotton industry?" The two things are not comparable. The manufacturer of things containing sugar or tobacco is the importer nine times out of 10, and the same man is exporter. He takes the Export Duty out of one pocket and puts the rebate in the other. It is a process which is part of his business. In Lancashire the Excise Duty is to be met by the producer of artificial silk. He passes it on to others through all the processes, bleaching, dyeing and finishing This Excise Duty goes all the way through until it comes to the exporter, and there the Chancellor recognises the fact that the Excise Duty has added to the capital cost, and offers 1s. 7d. rebate for what was originally charged 1s. It is going to do the exporter and manufacturer no good and is no use whatever. The Excise is 1s., the exporter gets 1s. 7d. Why the difference of 7d.? Where does it come from? The taxpayer of this country pays it. No one else can meet it. That is another great difficulty in Lancashire.

I want to deal with the further difficulty with which we are faced, namely, rebates. I understand the hon. Member for Rossendale (Mr. Wadding-ton) has already dealt with this but I wish to make one or two new points. The amount of the rebate on the artificial silk in the piece of cloth varies from 5 per cent., possibly to 20 per cent., of the total value of the cloth. That 5 to 20 per cent., the amount of the rebate which has to be paid, is often far more than the profit which the shipper makes on the goods. Therefore what is the shipper going to do if he is to get his goods out of the country? He can only invoice his goods below cost price, and having invoiced his goods below cost price, he has to trust for his profit to this rebate. You cannot have business conducted on such conditions. It may be possible with big firms who have big financial arrangements. But the cotton piece business is made up of thousands of small men. Our cotton piece goods are exported by every warehouse throughout this country, by men whose finances could not enable them to work in these conditions.

Already the Chancellor has knocked up against a snag, a snag which we told him was there, but in which he apparently refused to believe. The snag is this, that you cannot tell foreign-made artificial silk from British. What arises from this? The foreign artificial silk has to pay 3s. duty, and the Chancellor of the Exchequer in his amended paper has said that he cannot distinguish, and therefore we are going to have the same rebate, 1s. 7d. on both. Does not that mean simply prohibition, not protection but prohibition, on the importation of the raw material of Lancashire from outside? Three shillings import duty has to be paid if the manufacturer wants to import, and he only gets 1s. 7d. rebate. Therefore I say that it is impossible for him to import any artificial silk yarn. That is a further handicap, and we realise what this means in our competition with the foreign weaver, and the foreign manufacturer of woollen goods and cotton goods into which artificial silk is introduced, when we in this country are not even to have the cheapest raw material to manufacture while our competitors have it. What about our overseas market? The rebate is no use to us there under such conditions. This is near Protection. Protection, if you like, 20 per cent, under proof, but as a Free Trader I would say that that 20 per cent, does not salve my conscience. I would say to the Chancellor of the Exchequer, " Drop this pernicious excise." At any rate, if he does that, he will have removed one of our greatest difficulties as there will be no need for this system of rebate. It is often said that Lancashire manufacturers have little or no enterprise. Now that we are trying to show some enterprise, and trying to claim a place in the world's trade for this new development, we are told that we are only pandering to woman's love of display. I see the Financial Secretary to the Treasury, and I would remind him that so serious a matter as this should not be treated in a frivolous manner.

I would ask hon. Members to visualise the possibilities of this industry. We are not suggesting that it is at the top of the tree to-day, or that Lancashire cannot carry on without it, but we say here you have the most recent developments of an article showing the greatest possibilities of any article produced for generations, the basic material of which is wood pulp, the cost of which is not large. The principal cost is for labour and machinery. Who is going to tell me with confidence that, in two or three years, it may not happen that by improved processes this article, which is costing to-day 6s. a pound, will be cheaper than cotton yarn?

That leads me again to the point as to the possible reason why some hon. Members of this House who represent constituencies is Lancashire, and are interested in fine cotton spinning, see fit to approve of this tax. My hon. Friend the Member for Stockport (Mr. Hammersley). has had letters in the Press approving of these taxes. I do not want to suggest such a reflection on him, but I think he believes that by the reduction of the amount of artificial silk used the opportunity for cotton yarn is increased. But what a narrow view to take! Does he 'think that he is going to stop this great development throughout the world by putting on some taxes in this country? Not a bit of it. The world is going to have artificial silk, and it is Lancashire that is going to be without it It is because Lancashire will be so handicapped by these two taxes, as to be unable to take its just and full share of this great and new development in the world's trade, that the great industries of Lancashire, and, I believe, also of Yorkshire, must and will continue with all their might to oppose the application of these taxes.

The hon. Member has made a statement with reference to the Silk Association. I have had the opportunity of interviewing the President of the Association, who happens to be in the Gallery, and he informs me that though they do not speak for the whole of the artificial silk manufacturers, they do claim to speak on behalf of the bulk of the artificial silk manufacturers.

I think that I can speak on behalf of hon. Members on this side of the House in offering to the hon. Member for Blackley (Mr. Briggs) our congratulations on the energy and effectiveness with which he has placed his case before the House. I am concerned, as he is concerned, with the problem of the Silk Duties as it affects our industries in Yorkshire in the same way as it affects those in Lancashire. The inclusion of silk in both woollen and cotton textiles is important, not so much on account of the total quantity of artificial silk included as on account of the general alteration of the quality of the cloth produced. In the last two or three years, in the woollen and cotton trades, there has been a considerable expenditure of money in getting new machinery made, in re-adapting old machinery, in applying to old machinery new parts that are necessary for the easy transfer of the fibre, which the artificial silk represents. A great deal of money has been spent in extending the detailed processes of design and so on, which are opened up as a result of the application of this process. To me it seems nonsense to talk about there being an effective substitute, after the expenditure has been incurred during the last two or three years to make this particular type of work effective.

Whatever we may do here, whatever may be the effect of this Budget upon this particular type of production, abroad the work will develop. Czecho-Slovakia and all the European nations which have taken part in the development of this new method of applying artificial silk to woollen and cotton textiles, will get an opportunity for seizing upon the markets that both Lancashire and Yorkshire recently have been showing some signs of capturing as a result of the application of this particular method. It is not so much from the point of view of the cost of silk in articles bought in this country, important as that is, that our opposition ought to be mainly directed. It is because in two of the staple industries of the country the Government will make it more difficult for manufacturers to capture foreign markets through new processes and new designs, and to the extent that they are doing that they are adding in the long run to the difficulties of unemployment that are already too heavy to bear.

I pass from discussion of the Silk Duties, about which I had an opportunity of speaking in the recent Debate, to more general consideration of the financial proposals of the Chancellor of the Exchequer in this Bill. An astonishing change has come over the general demeanour of the House towards the Chancellor's proposals. When they were first put before us, the Chancellor of the Exchequer seemed to cast a spell not only over his own party, but, as my hon. Friend the Member for St. Helens (Mr. Sexton) has said, even over him, and, perhaps, over other hon. Members on this side of the House. That spell has worn off. It has worn off Members on the opposite side also, as was clear to-night when the Chancellor of the Exchequer was discussing the problem of the tax on silk and similar problems. There is serious disturbance in the minds of Conservative Members representing Lancashire and Yorkshire constituencies as to the effects which the Budget will have in the long run on trade and employment. Even at this late hour I suggest that if more Conservative Members had acted with the boldness and courage Which have been shown by the hon. Member for Blackley, and which were shown on a previous occasion by the hon. Member for Skipton (Mr. E. R. Bird), it is not at all unlikely that the Chancellor would have been ready to meet the demand that traders have universally put before him from Lancashire and Yorkshire. It cannot be expected that the words of hon. Members on this side—we are a minority of the House and cannot affect a vote—will have very much influence with the Chancellor; but I suggest to hon. Members from Lancashire, such as the hon. Member for Rossendale (Mr. Waddington), that a very heavy responsibility lies upon them, and lies more heavily upon them than upon any other section of the House, if, in spite of our protest, the Chancellor of the Exchequer insists on [carrying his proposal; and I believe their responsibility at the next Election will be a particularly heavy one.

It is worth while noticing, in passing, how considerably different is the attitude created by the present Budget from that created last year by the Budget of the Labour Chancellor of the Exchequer. On that occasion, although the Labour Chancellor was strongly attacked, no effort was made by the party opposite to challenge the Finance Bill by a Division. More than that, the party which supported the Chancellor of the Exchequer then was united in itself and remained united, and that party feels to-day that a great advance had been made and that there had been a real change in financial methods which, in the long run, would bring benefit to the working classes. Note the position to-day. It is true that the glamour of the Chancellor of the Exchequer has again fallen for a moment on hon. Members opposite, but it is well known in the industrial districts, both with regard to the new burdens that will be imposed in connection with the pensions scheme on employers and workers, and with regard to the proposals dealing with silk and the McKenna Duties, that the very gravest opposition has been aroused, and that the feeling is widespread, not only amongst supporters of the Labour Party, but among those who support the Conservatives, that one pledges given at the last Election—that nothing in the nature of Protection would be introduced—have been most definitely broken. The Opposition has become more serious in the last few days.

I had occasion to remind the House in a previous Debate that the hon. Member for Macclesfield (Mr. Remer) had stated to his constituents that he had heard privately from the Chancellor of the Exchequer that it was intended there should be a 15 per cent. Protection upon silk even under the early proposal. But now, with the suggestion of a rebate and the general alterations that have been effected—to take the evidence of Mr. Hamilton, who spoke for the Bradford Chamber of Commerce—the general belief is that 100 per cent. Protection has been given to silk and to artificial silk by the Chancellor's new proposals. Do hon. Members contest that statement? If they do not contest it how can the Prime Minister's pledges, both during and since the election, be said to have been kept? The opposition is not so much against the Chancellor of the Exchequer for his proposals, as against the Prime Minister, who realises the importance of a pledge and the need of honestly standing by it. The most serious charge we bring is that the Prime Minister has remained quiescent while the Chancellor of the Exchequer has continued to keep these proposals before the country. I sincerely trust that even now, particularly with regard to the silk duties, the alterations for which I have pleaded will be made.

I turn to another aspect of the issues raised by the Finance Bill. I desire to support the plea made by the right hon. Gentleman the Member for Colne Valley (Mr. Snowden) as to the excellent opportunity which the Chancellor now has for a practical application of the views which he formerly advocated in regard to land taxation. Why has no effort been made in that direction? One hon. Member to-night said that the question of land taxation had been worn threadbare during many discussions in this House. For those who are trying to get land, not only for agricultural purposes but for house-building purposes, this question is by no means worn threadbare. I speak with some personal feeling, because I am one of those who through the exigencies of the War have been compelled to live under housing conditions which involve one house being occupied by two families, and I am constantly striving, like the great mass of members of my class, to find a better house to live in, more room to expand and more room in which to work. I have been inquiring as to a piece of land on which to build a cottage and statements made in this House recently, when the subject of transport was being discussed, came home to me with particular force. It is perfectly true that in the last two or three years in the district round Manchester, and in other districts round our great cities, land has increased in value from £30 or £50 per acre to £600, £800 and, in some cases, £1,000 an acre. That question is not threadbare. It is intimately connected with the housing shortage, in spite of what has been said about the low prices that in certain circumstances have been paid for housing land throughout the country

10.0 P.M.

The question which I put to the Chancellor of the Exchequer is this. Under his proposals old age pensions, ultimately, and widows' pensions and the supplementary scheme of old age pensions at present, involve a burden which is placed solely upon employers and employed. Would the landlord class of this country reap no benefit from the improvement in the general health of the people that an effective scheme of insurance might bring about? The Chancellor knows as well as any Member of this House that, in the long run, the advantage of such general improvements, even improvements in the health of the community, can be reaped by landlords under the system which he himself so well described in years gone by. The right hon. Gentleman mentioned in one of his previous speeches in the House that he found his scheme of pensions in the pigeon-holes of the Treasury, left there by previous Chancellors, and the charge is made that the Labour Chancellor had his share in developing the scheme. I deny, as we have all denied, that this scheme in its present form is the result of any efforts of the late Chancellor of the Exchequer, but I would ask the right hon. Gentleman when he was looking for schemes in the pigeon-holes of the Treasury, did he not find there certain schemes by means of which he might have been able to place increased burdens upon the landlords so that they should play their part in these measures of social reform? I am giving away no secrets, because the Labour Chancellor announced in this House that, had another opportunity been given him, he had intended to institute a scheme of land valuation by which an effective system of land taxation could have been carried out. It seems to be the custom of hon. Gentlemen opposite to sneer when land taxation is proposed, because when the right hon. Gentleman the Member for Carnarvon Boroughs (Mr. Lloyd George) introduced his scheme, the system went wrong and practically nothing was obtained from it. Why was that the case? Because the right hon. Gentleman was trying to work in contact with hon. Gentlemen of the party opposite, who were determined from the beginning that his scheme should never work. It is no argument to say that because little or nothing could be obtained from land taxes on a former occasion, therefore it could not be obtained if a real and effective effort were made at land valuation. The strong criticism with regard to the proposals of the Chancellor is that while he places increased burdens upon industry, while he introduces Silk Duties in his effort to place taxes on luxuries, yet he has let off the Super-tax payer and made it easier for certain types of payers under the Death Duty scheme, and he has failed to go to that class in the community which does least for the welfare of the community and whose continued existence depends on the absolute right to draw rent. We continue to put forward the strongest demand that in some immediate proposals brought in by the Government, there should be found a means of enabling those who draw toll from the land, to pay their share in any great measures of social reform that are introduced.

The ex-Chancellor of the Exchequer this evening described those of us who sit on these benches as "servile hordes" whom he expected to follow the Government Whips. I wish to give reasons why we are not only going to follow the Chancellor of the Exchequer, but are also going to follow our own judgments. The two happen to coincide, and I hope the same thing will apply to hon. Gentlemen opposite when they are supporting their leaders. I desire first to deal with what was said by the right hon. Gentleman the Member for Carnarvon Boroughs (Mr. Lloyd George) with regard to the appalling load of taxation borne by this country—some £800,000,000 a year as compared with the £300,000,000 or £350,000,000 borne by Germany. I think the right hon. Gentleman overlooked two factors. One is that the Germans by their policy of inflation wiped out their War debt, while our War debt costs us some £300,000,000 a year in interest. I remember working out, not long ago, the amount of £6,000,000,000 sterling which the Germans borrowed during the War and it came to rather less than one English penny, because if you multiply by one million millions you will find that a penny is equal to more than £6,000,000,000 sterling, and that is one of the reasons why Germany has been freed with regard to interest on War debt, which costs us £300,000,000 a year. The right hon. Gentleman also mentioned defensive services. As long as the British Empire remains we have to provide a Navy, Air Force and Army to safeguard the Empire. Germany, for reasons into which I need not enter, has lost what there was of a German Empire, and those two sums together just about equal the difference between the German Budget and our Budget, and the right hon. Gentleman the Member for Carnarvon Boroughs ought to remember that in making his comparisons. I do not suppose he wants to go in for a policy of inflation, which has not only ruined millions of rentiers, to borrow the phrase of the right hon. Gentleman the Member for West Swansea (Mr. Runciman), but has also increased German hours and reduced German wages to a most deplorable extent and impoverished the whole country. Nor do I think the right hon. Member for Carnarvon Boroughs wants us to abolish or cut down our Navy, Army and Air Force to the extent that those of Germany have been cut down by the Treaty of Versailles.

The hon. and gallant Member for Taunton (Lieut.-Colonel Gault), who made an interesting maiden speech, said something with regard to Imperial Preference. I think it has possibly escaped many hon. Members that a great difference is made in dealing with our Dominions overseas by the introduction of the gold standard. The exchange against this country with regard to Australia was, until quite recently, 3½ per cent., with regard to New Zealand 2¾ per cent., and with regard to South Africa 3½ per cent. In other words, if you wanted to send £100 to Australia, you had to pay to your bankers here, not £100, but £103 10s., and in many cases you had to send more. I think the return to the gold standard has done more to facilitate our trade arrangements with Australia even than has the return or the augmentation of Imperial Preference. Our exchange with Australia is now practically back to par, and with South Africa, instead of the English pound being at a discount of 2·5, we are at this moment at a premium. No one can have business dealings with Australia for a long period of years, as I have, without realising the immense difference that it will make to inter-Imperial relations and the great advantage to those of us who wish to see the greatest possible advantage taken of the British Dominions beyond the seas and their trade in these difficult times.

I heard, some while ago, some little impatience, not only amongst hon. Members opposite, but also amongst my own friends, with regard to the question of Inter-Allied debts. Many of us are liable to forget that it was over four years before my right hon. Friend, now the Prime Minister, then Chancellor of the Exchequer, went to the United States and started a scheme for the repayment of interest and sinking fund on the very large debt we owed to the United States. We had not been ravaged during the War, as had France and as had Italy, and we had not had, as had France, 10 of our principal Departments, the most highly industrialised Departments, in enemy hands for four years of the War, and for some years after the War not able to contribute towards the taxable capacity of the country. I understand that in pre-War days those Departments ravaged by the Germans during the War. which it took years to reconstitute, contributed roughly one-fifth of the whole of the taxation of France. That gives one an idea of the difficulties that France had to reconstitute her devastated regions. Furthermore, she has had to spend roughly £1,000,000,000 in reconstituting those areas. That sum was obviously bound to deflate the franc and to make French finance even more difficult than it would otherwise have been.

I happen to be myself, in a small way, a holder of French rentes, and, therefore, I am a rentier in France, and I followed carefully the depreciation in the French exchange, but I also appreciate this, that we have had the Income Tax in this country some 80 years. It is just as easy for the Income Tax authorities to collect 5s., or even 6s., in the £ as it was to collect 1s. before the War. It is extremely unpleasant for the recipient of those demand notes, but from the point of view of machinery, the machinery in England is already in existence, which is not the case in France. France, largely an agricultural country, has not had the machinery for the collection of Income Tax, and there have been very great difficulties in connection with its collection. Furthermore, we are here a highly industrialised community, exporting large quantities of commodities abroad. France has always been an agricultural country, and the question of paying debts abroad is one that is new in the last few years. Many of us thought, five or six years ago, that we might get many thousands of millions of pounds out of Germany. I think some of us have realised that that is no longer possible, but in the case of France, which has not got even a balance of credits in its favour, the whole position, from the point of view of paying inter-Allied debts abroad, is extraordinarily difficult, and I hope that the Treasury officials, who are going into these questions with the French, I believe, at the present time, will realise the difficulties of the French position, while at the same time they do justice to the British taxpayer, who feels rather strongly at the present time that for two years he has been paying debts abroad but has been receiving no interest on what this country has lent to her Allies.

I also want to say a word or two in regard to the vexed question of Super-tax as against Death Duties. I welcome, if I may say so, the extension of the principle by which earned incomes, which already in the lower ranges receive a. considerable measure of sympathy from the Chancellor of the Exchequer, are to receive a further measure of sympathy, with regard to those, not of great wealth, but who possess what we may call middle wealth. One wants to see people who get their living in this House, at the Bar, in medicine, or in other walks of life, if they are earning their incomes by their own intellectual toil, put at an advantage over those who merely inherit considerable blocks of capital from the previous generation. That is what the Chancellor of the Exchequer is doing. I am not quite sure that the right hon. Member for Carnarvon Boroughs appreciated that, because he spoke of the question of those who inherited a million pounds. To start with, they will have no extra Super-tax at all, and also their Death Duties already run up to 30 or 40 per cent., but I feel that those who, with but small capital, have by their own exertions earned these big incomes, are entitled to some special measure of consideration more than that given to those who have inherited in the ordinary course of nature £50,000, £100,000, or £150,000. The people upon whom it presses most hardly are those who, already at 65 or 70 years of age, are not able to insure against the extra Death Duties that their estates will have to pay, but I ask them to remember this, that in the next generation their successors will have a reduced Super-tax to pay for the 20 or 30 years which, we hope, will elapse before Succession Duties come along again. It may not be much help to the older generation, but I am sure it will be to the next generation.

The ex-Chancellor of the Exchequer is proud, not without reason, of the very near estimate that he made a year ago of what our balance-sheet would be at the end of the year. I think many of us rather forget the fact that in a way a much nearer guess was made in 1919 by my right hon. Friend the then Chancellor of the Exchequer, now the Foreign Secretary, who produced a Budget for what he called a normal year. It was rather brave for him to do in 1919, to try to forecast what a normal year would be. I turned up the figures only to-day. He took the expenditure in a normal year as being £808,000,000. To forecast so accurately six years in advance, as the then Chancellor of the Exchequer did, is, I think, a most remarkable feat, and one which does very great credit to his prescience.

I only want to remind the House that, in the next three or four years, close on one-half of our total Debt either falls due for redemption or can be repaid at the option of the State. If we can save, as I think we can, 1 per cent. on this very large sum; if we can cut down the rate of interest, which is now mainly 5 per cent., to, say, 4 per cent., we can save by 1929 —possibly in the lifetime of the present Parliament—some £30,000,000. That, on top of the £10,000,000 or so, that the Chancellor of the Exchequer hopes to save, will give a very considerable margin for the reduction of taxation. May I remind the House of what Disraeli said after five years of war, which cost this country infinitely less than the Great War?

Why I think this Budget is not a sound Budget is that it does not take into account the real factors behind the financial situation. The Chancellor of the Exchequer appears to have estimated the revenue of the country as a fixed quantity over a. large number of years ahead—1960, I think he spoke of. That is by no means the case, and the great fault of this Budget appears to me to be that it estimates a fixed Revenue and increases the Expenditure. I regret somewhat that I find myself in agreement with hon. Members who sit on the Back Benches behind where I now stand. They have said very truly that this Budget increases expenditure. It does. Not only does it increase the expenditure for the current year, but it pledges the expenditure for years to come. I am not criticising the ideal or intention of the widows' pensions' proposal which has been put forward by the Government, but it is a matter of serious financial consideration that it pledges the prospective savings of expenditure in years to come. That has not yet been fully explained, and I am not going to criticise or offer any other objection until the full scheme is before the House, when I may have something to say about it. But it is a matter for serious comment, and it is to be noted, that either, on the one hand, the savings which are to be made on the supposed prospective diminution in unemployment are pledged, or the diminished charges, which will inevitably ensue as the War pensions fall in, and the War pensioners decrease in numbers in the course of time.

The right hon. Gentleman the Member for Norwich (Mr. H. Young) urged the Government to effect economies in expenditure, and very rightly. In that part of his speech I wish humbly and respectfully to concur. I venture, however, to think that he made one omission in his criticism of and suggestions to the Government. Governments can do something to cultivate the sources of revenue. This Government does something in a certain direction to encourage employment. The Chancellor of the Exchequer assured us that in respect of the duties on motor cars that they are already having that effect; but there are other directions in which effort can be made, and it is remarkable the delay on the part of the Government in making inquiries into those industries destroyed, or in danger of being destroyed, by foreign competition and the further consequent slackening of employment. I think that the Government have lacked energy in trying to preserve those industries of this country. Some of our staple trades are in a state so critical or dangerous without precedent in our previous history. However, I do not want to detain the House, and I do not want to extend my remarks beyond general principles, or as to consider how far the Finance Bill we are now discussing encourages employment and stimulates industry. I cannot vote for the Second Reading of this Bill, because the Budget imposes increased taxation, and it does not provide those new sources of revenue, or encourage or stimulate, those new sources of revenue that our country needs.

By-and-bye, when we come to the Committee stage of the Bill, it will be competent to discuss the details of the various proposals made. I may then be able to deal with that part of the Budget which contains the Silk Duties. I remember that in the days when tariffs were in force in this country—that is before Free Trade was adopted—that Silk Duties were always a source of difficulty and division. I am informed by those who have investigated the subject with some care, long before the subject was raised in this particular connection, that there are between 9,000 and 10,000 articles in which silk is used in more or less degree in this country. These articles sooner or later will come up for discussion and decision before the Customs authorities, the Board of Trade, and so forth. The Chancellor of the Exchequer, perhaps, hardly realised what a thorny subject he had embarked upon when he proposed these for revenue purposes. Those of us who hold certain views, but are not hidebound, who like to deal with subjects of the kind on their merits, as national questions, and as revenue questions, were surprised that he had selected Silk Duties as a form of luxury taxes for revenue purposes. I venture to think that if the excises tax were abandoned there would be very little loss of revenue. However that may be, I venture to say to-night that this Budget is disappointing because it involves increased expenditure, and does not encourage sources of revenue on which the country depends for its taxation, and, indeed, for its very existence.

I do not know how long this Debate is going to be carried on, or what hours the House is to keep to-night. But I think it might be convenient if we brought one chapter to an end, or, rather, if we wound up one paragraph, and therefore I venture to address the House at this moment. My right hon. Friend the late Chancellor of the Exchequer has described this as a "rich man's Budget," and the right hon. Gentleman the Member for West Swansea (Mr. Runciman) choosing, perhaps, a more particular word, described it as a " rentier's Budget." Substantially, I think both mean the same thing. What I say is, and the Chancellor of the Exchequer's speech has amply justified it, is that this is a Budget with no great principle in it at all. There is no vision as to the future organisation of taxation in this country in relation to the industrial interests of the country. But there is a certain amount of readjustment between a man's right hand pocket and his left hand pocket. If he is to go a journey, it is perhaps rather inconvenient for him that he should have too much money in his right hand pocket, and therefore the Chancellor has devised an expedient by which the weight of the two pockets should be a little better balánced. That involved no great skill and no great science, and, so far has meant no great harm. There is no great harm in increasing the Death Duties and taking off the Super-tax, provided it is done in such a way that the Super-tax payer is identical with the Death Duties payer, and also providing that there is no difference of principle and no difference in national expediency between taxing income and taxing capital.

But there is another adjustment, that is between the burden borne by the two different classes, the rich—a conventional word—and the poor. From that point of view, my right hon. Friend the Member for West Swansea and my right hon. Friend the late Chancellor of the Exchequer are perfectly right, for so far as the balance has been readjusted it is all against the wage earner, the poor consumer, and all in favour of the rentier class, the rich class. The Chancellor's reply was, "I will give you the figures," and he gave us the proportions and absolute figures, I confess I was not able to follow him, but I think he said there was £24,000,000 income from stamps as direct taxation. That is rather an important consideration, but I understand the figure which he gave was the figure of the Inland Revenue, and I do not think we require, to remind the Chancellor of the Exchequer that the income of the Inland Revenue is not an income from direct taxation. Barring these little mistakes, to what do his figures amount? He did not rebut the charge made by the late Chancellor of the Exchequer. All he said was, I confess I am a sinner, but not nearly such a black one as the late Chancellor of the Exchequer's words seemed to paint." That is good enough for us.

The right hon. Gentleman seems to be under the delusion that his Budget is getting on very well, but I would like to remind him of the speech which was delivered in this Debate by the hon. and gallant Member for Burton (Colonel Gretton), who has always been a good and faithful Member of the party opposite, with no Free Trade humbug about him. If the Chancellor of the Exchequer cannot get consolation there, then I would refer him to the present state of Lancashire, and I can assure him that he will find things outside far more troublesome than is going to be the case inside this House. I have never known the right hon. Gentleman leading this country into a mess without assuming that he was all right. There was never a disaster in which he was involved which he did not claim as a potential triumph if the country would only give him a few years time to show what he was doing. I venture to say that there is no disaster with which the right hon. Gentleman has been associated that will be more expensive than the disaster of this Budget.

It has been truly said before, and it was said to-day by the right hon. Gentleman the Member for Carnarvon Boroughs (Mr. Lloyd George) that one of the most conspicuous failures of this Budget is its utter lack of any relation to the present industrial position. There are one or two striking characteristics. First of all, there is the steadily falling standard in the life of the wage-earner, which is steadily going down, not altogether on the part of those at work. The most disquieting feature is that there are so many thousands of our people who are not at work at all, and who have little prospect of finding employment of any reasonable kind. Iron works are closing, factories are working short time, the miners are working short time, and our markets have been restricted. Another thing is that there is a very deplorable indication of a falling spirit in enterprise so far as the industrial classes are concerned, and there is a feeling that our burdens, compared with the lesser burdens of our Continental competitors, are going to crush us down. There is a feeling that we have lost markets, and that, somehow or other, in the keen race of industrial competition, we are beginning to get puffed, and there is something the matter. And every burden, every threatened burden, has a weight which, in that frame of mind, is out of all proportion to its real financial and industrial effect.

Further, there is a redistribution of power, a new redistribution of economic power, going on. Finance, on account of the liquefaction of national wealth during the War, is no longer industrial finance. It is pure finance. There are more people living in this country to-day upon income from investments, without doing anything to increase productive efficiency, than ever there were before That is a natural consequence of the state of general National Oebt. That is deplorable. The effect of it is that those who control finance, the moneylenders— I use that term in no offensive sense at all; I mean the pure financiers, the interests with capital, those who handle money, control its rates, control its issues, control its securities—are more powerful in this country than ever they were before, and it is not for the good of our trade, and does not make for brighter prospects of industrial expansion.

Those are circumstances that every Chancellor of the Exchequer now should have taken carefully into consideration, considering how he could have adapted his Budget to minimise the evils and to make the possibilities for good greater. What are the principles upon which this Budget has been drafted? They are one or two very simple ones. I shall not refer, except in so far as it is necessary, to details, because on the Committee stage those details will be discussed. The Chancellor said to-day that industry was feeling the chill and the check of a high Income Tax. It has done nothing of the kind. It has been feeling the chill and the check, perhaps, of a heavy National Debt, but a high Income Tax was not imposed out of revenge, or for any reason of that nature. A high Income Tax has been imposed because there is a high National Debt, and because this people, being an honest people, pays its debts. It can only pay its debts by balancing its Budget, and it can only balance its Budget by imposing a high Income Tax. That is why the high Income Tax is imposed.

That, however, does not carry us quite far enough. The Chancellor said that my right hon. Friend, speaking for us all, expressing the views of all of us, takes the view that the more taxation there is upon wealth the better. That is sheer nonsense. What is sound is that, if you have to pay for a. high National Debt, wealth ought to be taxed rather than consumption and productive industry. And how does the right hon. Gentleman get out of it? We make a, reservation which is not specially ours, and does not specially characterise us, that, if you have to levy a high income from your people in the form of a tax, the tax that does least damage to an industry is an Income Tax, which is imposed upon personal incomes and personal possessions. That is what we say. No one has ever denied it. No one who has ever worked out the national economics of Income Tax in relation to industrial costs and costs of production has ever taken any other position than that. What the right hon. Gentleman has done now is that he has abandoned that position—quite truly in a small way, but the small things of 1925–26 may be the larger things of 1926–27.

What does he call that? He uses that old-fashioned, much exploited phrase "broadening the basis of taxation." There is no virtue in broadening the basis of taxation. The basis of taxation ought not to be broadened unless every increase of the margin covers a class of people who have a surplus over and above the cost of living. The principle of broadening the basis of taxation leads one direct to national bankruptcy, unless the new discoveries of shoulders to bear the burden are discoveries of people with incomes well above that minimum standard which ought to bear no taxation at all. That is all thrown over now. There is no question of capacity to pay. It is a sort of poll tax—so much per head. He says, " If you have not enough wages so that I can get it directly from you, then you have all got to eat something and you all have to wear something, and I will get it from you by imposing taxes upon those things." That was very well illustrated in his own confession, where he said, " I have reduced on the whole the burdens on the Income Tax payer by about 1s.—not quite, but about 1s." If he had effected that reduction of Income Tax because he had a surplus next year and proposed to spend it in that way I should not have agreed with him, but it would have been sound finance. But that is not what he has done. In order to make that possible be imposes new taxes of an indirect kind. Therefore the adjustment is not merely, as my right hon. Friend did last year with a balance in his hand, decide to spend that balance —[HON. MEMBERS: "Whose balance?"] —what does it matter whose balance it is? We are dealing with economic arguments My right hon. Friend, with a balance in his hand, decided that it should be absorbed mainly by reducing indirect taxation. He did not make that possible by increasing direct taxation. As a matter of fact he reduced both, whereas the right hon. Gentleman eases the direct taxpayer by imposing new burdens upon the indirect taxpayer, which is thoroughly wrong and most objectionable at a time when the standard of life is falling and when thousands of people who will be indirectly affected by these taxes find it difficult to get employment in order to earn an independent living of their own. That was his first principle—no more assessment of capacity to pay, rather the modelling of the Budget upon the principle of a Poll Tax.

The second principle he has introduced is Protection pure and simple. It is no use talking any more about this not being Protection. It is Protection, and I should like to ask the right hon. Gentleman, who, I understand, is to follow me, what he has to say to this? When the Budget Resolution were introduced, we were told that it was not Protection. We were told that it was merely a necessary means of finding money in order to make it possible to reduce the Income Tax for the Income Tax payer. Then, apparently, the right hon. Gentleman and his advisers had not thought it out very carefully. After their announcement, they found that Lancashire was in arms, and they began to haul their flag down. It is all very well to talk about the great prevision that they had. They had none. They never would have reduced by one halfpenny, they never would have changed a single provision of the first scheme produced if they had been able to stand by it. They cannot stand by it, and I venture to say that before we get out of Committee, they will not stand by it then.

They first of all said, "This is not Protection. This is so carefully balanced one way or another that in the end the home producer has no advantage over the foreign producer, and the questions of Tariff Reform and Free Trade are not in consideration at all. That is not the case now. Now it is a clear case of Protection, absolute Protection with special advantage for the home producer. [HON. MEMBERS: "Hear, hear."] I am glad that I drew that cheer. I hope the Prime Minister has not been deaf to it. I was a little doubtful whether I was influencing him, but from the right quarter in- fluence has come. His followers behind him have declared that this is a Protective Measure. You cannot have it both ways. It is perfectly clear now that the protection is so great that it may mean that there will be a monopoly—[Interruption.]. There will be—[An HON. MEMBER: "Good wages."] What I am interested in is Protection. What the Prime Minister is interested in is Protection. [An HON. MEMBER: " Employment."] The Prime Minister has said, " Until I get Protection, I cannot pay good wages, but I am not going to give you Protection. The only Protection you can get is through the Safeguarding of Industries Act." I should like to ask the Prime Minister what he thinks of the development of this proposal as outlined to-day and as contained in the Finance Bill, the Second Reading of which we are now discussing. It is very crude Protection. I am quite sure that the Prime Minister would never have made himself responsible for such a scheme as this if he had been responsible for the beginning of his protective programme.

This Protection is going to increase the difficulty of the home user, the home manufacturer in getting his raw material. It is a Protection which imposes an impediment upon the home industry, expense upon the home consumer and difficulties upon the home industry. It is a Protection which is going to damage and not to assist a young industry. It is a form of Protection which is going to damage a young industry, because it is going to put it into the hands of monopolists almost straight away. [HON. MEMBERS: "No!"] Certainly, and those monopolists controlling the markets, controlling the production, and production which even at this moment is not enough to supply all the needs of the home demands. I have never known anyone interested in national industries who could believe that Protection could produce such a scheme as this. It is going to create monopoly, to create trusts, and to put them into such a position that I do not believe anybody who takes a national view would venture to put them in, except the right hon. Gentleman who has produced this Budget, and who has modified it so greatly under stress of pains and penalties. Ho is only going to tax luxuries. Does he mean to say that artificial silk is a luxury? I believe he is under the impression that it is. Anything that is glossy to the right hon. Gentleman is a luxury. If it had not glittered or had no gloss upon it it would have been passed by. He would never have noticed it at all. It is the appearance of it.

It is nothing of the kind. Neither is cost or in use, nor in the extent of its use or in the classes that use it, can artificial silk be called a luxury. The right hon. Gentleman made up his mind to have a nip at real silk. Having made up his mind to do that, he included artificial silk in the Duties. The effect of it is going to be that those who use cheap artificial silk will have to pay more for the goods and more for the things in which it is used, and the right hon. Gentleman will once again have had the great pleasure of taxing the poor people because they are consuming things that have a better appearance. I hold in my hand statements of two people who know what they are talking about, much more than the right hon. Gentleman opposite. This is the statement of the Secretary of the Co-operative Wholesale Society: this Bill comes into operation and 10s. are given to widows and 5s. and 3s. to children, that will have the effect, even if these people have to go to the boards of guardians to supplement it, of reducing the burden of rates, and that in so far as the burden of the rates is lower, then the cost of production will be lightened and compensation will be given for the cost now proposed by the Chancellor of the Exchequer. That may be so. How is it done? How is the burden on the taxpayer lightened? By a scheme which means that the greater part of the money from which the pensions will be provided will have been found by the very people who themselves will ultimately claim the pensions. [HON. MEMBERS: "Hear, hear!"] I am very glad that the other side takes no objection to the statement which I make, that the pensions which are going to relieve the rates are to be made possible by levies upon the labours of the pensioners, exactly the people who in due time will come up on the boards of guardians.

What does it all amount to? Ratepayers are going to be relieved of burdens that are not going to be put upon surpluses and future incomes, but upon the very poorest sections of the wage-earners. All the great benefit is, first of all, to be abstracted from the very people who ultimately are to require the benefit. The right hon. Gentleman foreshadows a scheme for subsidising the Unemployment Fund as he did to-day. There is no relief there. The burden remains the same. Business may tolerate this Budget. Its representatives here may go into the Lobby in favour of it. What prospect does it present? When they tell us that the burdens are too great now, are they honest with us or are they not? If they are honest with us, they must oppose this Budget. There is no other consistent action for them to take.

11.0 P.M.

We have been told that they voted largely for this Government because they believed that in our present expenditure there were possibilities of large savings, not by cutting down Whitehall staffs, though that is possible and can be done, not savings by reducing salaries of Whitehall staffs, not savings in the cost of armaments. We were told that there were possibilities of savings because the commitments for War pensions for unemployment, etc.. were terminable. They were a diminishing amount, and, as the years went on and deaths came, these burdens upon capital, which were purely temporary, would be relieved. Are they still of that opinion now? If so, then their faith is much greater than their business capacity. They are told that this will tie up their finances to 1960. The savings on pensions are already mortgaged. They are told that as trade gets better and the figures become more normal the savings are already mortgaged. Then they will come and tell us next week, when they meet in an industrial conference, that labour must accept a drastic reduction in wages because the cost of production has gone up. To-night they will go into the Lobby and declare that they can stand these extra burdens. To-morrow they will meet trade union leaders and say that they are already so overburdened that unless wages are reduced and costs of production lowered they cannot go on any longer. I leave it to them. So far as we are concerned, with the falling standard of life, with the lowering of wages, with increasing unemployment, we consider it our duty— and we shall carry out our duty—to defend the working classes against the unjust exactions imposed upon them by this Budget.

There are two subjects on which every inhabitant of these islands considers that he has innately an expert knowledge, and on which he can always lash himself into a fury—religion and finance. [ Interruption, and HON. MEMBERS: "Peace in our time, O Lord!"]

I have spoken many times in this House on finance during the last eight years. I have always tried to treat finance as purely a practical, and indeed a financial matter, and I have embarked as little as possible into the stormy arenas of party politics, which are very apt to deflect judgment in these matters. I would merely say, in passing, that the letters which the Leader of the Opposition has just read to us left me cold, for this reason: They bear an astonishing resemblance to the letters which are always read during Budget proceedings on any change of tax, from whatever party they may come, and, mutatis mutandis, they might have been written on behalf of the Morris-Cowley Company last summer. The House will remember that I never used the arguments used in those letters, and I do not think that many people will be influenced by the arguments to which we have just listened. One of the chief gravamens against the present Budget was uttered in the early part of the Debate by the late Chancellor of the Exchequer, and has, indeed, been the chord which many have struck. It was that the Budget ought to have been directed to the stimulation of trade and that the Budget is in fact a rich man's Budget. Of course, that is a phrase that will be used widely in the country, and, like many phrases that are used in the country, it will not be believed by anyone who does not want to believe it. The sole reason for calling it a rich man's Budget is the fact that this year my right hon. Friend has turned his attention from indirect taxation to the Income Tax. I do not know whether that in itself is a matter of original sin. The late Chancellor of the Exchequer apparently was oblivious of the fact that only a year ago in his Budget speech he used these words:

"I must not be understood to imply that I anticipate the permanent maintenance of a 4s. 6d. Income Tax. What I mean is that, so far as concerns the relief I can afford to give this year, there are other taxpayers whose claims I must prefer."

He said again on the Report stage of the. Ways and Means Resolution:

" Although I could not do anything this year in the way of a reduction of the Income Tax, it must not be assumed that I look forward to the maintenance all the time of an Income Tax at the basic rate of 4s. 6d."

I am glad to hear those cheers, because they show that if the Chancellor of the Exchequer who reigned under the late régime, had made the proposals which my right hon. Friend has made, they would have been received with hurricanes of applause. While I am speaking about the Income Tax I think it is just worth while reminding the House that while it has been put to us that this is solely a remission of taxes for the rich, 90 per cent, of the Income Tax payers have incomes, as a matter of fact, of less than £l,000 a year. That is a very large proportion of the middle classes — clerks, foremen and people of that class, who cannot by any stretch of the imagination be called the wealthy—and the proposal of increased allowances for earned incomes has increased the proportion of relief as compared with total income to a very large number in some of the most deserving classes of the community.

Of course, it is quite true that when you give a reduction of Income Tax, people benefit who are rich, as well as those who enjoy smaller incomes, but there is no means of escaping that, unless you decree, what never has been decreed yet, that no one shall ever have any reduction at all of Income Tax if his income be above a certain rate. It is exactly as I explained to the House when I was Chancellor of the Exchequer, and was able to reduce the tax on beer.—"To him that hath shall be given," and if you take a penny off the pint of beer—

I thought that would interest some portion of the House. If you take a penny off the pint of beer, it is perfectly obvious that the gentleman who only drinks a pint of beer gets a small remission compared with the gentleman who drinks a gallon. In other words, as far as the incidence of relief goes, you can act very unfairly as between, say, the Noble Lady, the Member for the. Sutton Division of Plymouth (Viscountess Astor), and the hon. Gentleman the Member for—any place. The illustration is perfectly simple and perfectly apposite. So it is with the Income Tax. So long as you have a flat rate, the more tax a man pays the more benefit he must get from the remission. Therefore, to say that you are acting unfairly in relieving the rich is completely illogical unless you are prepared to say that in no circumstances shall a remission of taxes be given to the rich man. I think that is a point well worth making, and one which has not yet been made this afternoon.

There is one other point in connection "with the remission of Income Tax. Of course, it has been hotly contested that this does not necessarily benefit industry, but the very people who are using that argument to-day are the same people who some time ago were saying that industry was being crushed by Income Tax. They cannot have it both ways, but, in any case, I do not think anyone can dispute this, that we have to look in this country, as at present constituted, very largely to the Income Tax paying classes for the provision of capital in this country, and one of the greatest needs we have to-day in all industries' is capital, as cheaply as it can be got. The more you can get, the cheaper it gets, and any reduction of taxation that may tend, as we hope this small reduction will tend, to provide an increased amount of capital in the country is all to the good, and ought to be received with interest and gratitude by this House.

The next point I should like to make is with regard to this question of which we have heard a good deal, the question of pledges. I want to say a word about that. I remember very carefully, and I have looked up, every pledge which I made before the Election, during the Election, and after the Election, and I take it that the gravamen of the accusations which are made against me is that, by re-imposing or sanctioning the re-imposing of the so-called McKenna Duties, I am breaking a pledge, because those are the duties which are now called entirely Protectionist duties. [HON. MEMBERS: "Silk as well! "] I never gave any pledge with reference to the McKenna Duties. I have never looked on the McKenna Duties as Protectionist taxes. I look on the McKenna Duties in exactly the same light as I did in 1916. They were duties that were put on for revenue; they lasted many years; they were taken off last year. I attacked their being taken off, and I commented on it during the Election, solely on one ground, the ground that, in my view, it was an act of stupidity throwing away revenue which was badly needed in the present state of the country's Exchequer. They have been re-imposed for that purpose, and for that purpose alone. It is perfectly true that when hon. Members opposite get up and call them Protection, they very naturally draw a cheer from many of my hon. Friends behind me. It is very natural. You expect them to cheer when you say that, and you get the answer that you expect.

One word about silk. I cannot myself, so far as I am able to understand it, acknowledge, from my study of economic history, that the Silk Tax is a protective tax. It is levied primarily on an article which is not produced in this country, and it is guarded in this country by an Excise tax. The ultimate difference between the Excise and the other tax is not yet completely and finally settled, as it will be in Committee. It probably will give a benefit to the producer at home exactly in the same way that Mr. Gladstone gave one 60 years ago or more in the case of tobacco, and by no canon of Free Trade with which I am familiar can the duties as proposed by my right hon. Friend be called protective duties. I am sorry my right hon. Friend the Member for Carnarvon Boroughs (Mr. Lloyd George) is not here, but I have only one observation to make about his speech, and that is to mention the great pleasure with which I heard deep call unto deep when he spoke of my right hon. Friend beside me, the Chancellor of the Exchequer, and told him that the glamour of his rhetoric had evaporated. No man in this House is a better judge, and, after all, now that the trombones have blared across the floor of the House, it is time for the muted strings. I would merely say, in passing, that no finer instance of the glamour of rhetoric could have been given than the right hon. Gentleman himself gave when he spoke of the Geddes Committee having brought about economies in this country to the tune of several hundreds of millions. The actual figure was £64,000,000, and it led to the inevitable reaction that always follows too swift and drastic action, for the cuts that were made in the Air Force and education brought about such a wave of popular feeling that it became perfectly impossible for any Government in the years immediately following to exercise the economies that were desired in those two subjects, and they are as far as ever from bringing them out to-day. I can only suppose that slight slip between "several hundred million" and 64 millions arose from this fact. I remember once, as a young man, I tried to learn Welsh, and I gave it up, because I found in the numerical notation, when you get beyond 19 or 20, it becomes perfectly impossible for the Anglo-Saxon to understand the Welsh notation.

One of the reasons why my right hon. Friend's Budget commends itself particularly to me, and will commend itself to our party, as also, I believe, to the House, and I am certain, to the country, is because whatever may be said of this or that detail in it, it follows the soundest lines of prudent and conservative finance. We have travelled in the last six years a long way towards the rehabilitation of our country as the financial centre of the world. The first step on the journey was the introduction of the balanced Budget under the Coalition Government in 1919. The next was the resolution of this country to fund its debt to the United States. The third was the definite determination in the Budget which I had the honour of bringing in that a sum of no less than £50,000,000 a year should be allocated to the redemption of debt each year. I remember very well the late Chancellor of the Exchequer said at the time that that ought to have been £100,000,000.

I did not. What I did say was that the present Foreign Secretary, as the right hon. Gentleman the Member for Hillhead (Sir E,. Horne) said, said it ought to be £100,000,000 in a Treasury Memorandum.

I beg the right hon. Gentleman's pardon. I thought he was a still sounder financier than he is. This year my right hon. Friend has put the coping-stone on this edifice by restoring the gold standard, and I am proud to think that, small as my personal share may have been, I took some share in every one of these steps, and have the honour of being the head of the Government which has accomplished this final step. And I cannot help feeling—although I am not given to feelings of malicious joy—a malicious joy that the very critics who blamed me most for liberating this country from American shackles by funding the Debt are those who are accusing my right hon. Friend of riveting the American shackles on this, country by returning to the gold standard. I was very glad to notice the realisation on the part of every section of this House of the grave situation in which, not the whole of the British trade, but certain British industries find themselves to-day. This Budget is, I think, the first time in which responsible speakers on the Front Bench opposite have spoken of the danger of putting the lightest burden—if only a straw—on the back of British industry. I understood from the speeches they have made that an extra 4d. per week per man would be a burden that industry could not stand. That must have been a grave theory for their supporters in the country, because if they regard 4d. per week as a crushing burden on British industry, it must be impossible for them, I regret to say, to give that support they might to any demand for £1 a week or for any other sum that might be asked in connection with British industry.

The Labour party have one advantage over us. They have put in their Resolution what amounts to a vote of censure upon us for not fortifying the Exchequer by raising money by taxation on land values. It is a curious thing to put down, because, as a matter of fact, we are pledged by the pledges which we gave at the Election not to do anything of the kind. So we are censured for not breaking our pledges. Let that pass for the moment. We none of us know what they mean by the taxation of land values. We have no idea what revenue can be raised, or how! The only experience we have had up till now has been the taxation imposed by the right hon. Gentleman the Member for Carnarvon Boroughs which he himself removed from the Statute Book after a checkered career and a somewhat inglorious course of about 10 or 12 years. It is another instance, I believe, of taking a thing that is unknown and unfamiliar as being something magnificent. I happened to put in my pocket to-day a slip from a daily calendar which seems peculiarly apposite to this question. It is from Stevenson, and it is to this effect: advantage in a triangular duel for the man who does not get hit. I am sure everyone in the House will remember the historic triangular duel in " Mr. Midshipman Easy " in which the purser's steward was wounded in such a manner that he was unable for some time afterwards to take his seat. So it was in the last election. In the triangular duel then, in the cross firing that took place, many, many hon. Members who had been known here for years were unable, after the duel, to take their seats, in spite of our having escaped unscathed.

There is one new burden which is being imposed in conjunction with this Budget, and that is under the Pensions Bill, on which I would say a word, as it has been touched on This is what I want to say. In the first place, that was one of the most solemn pledges we undertook at the election. Many hon. Members in different parts of the House have urged us to set that pledge aside. We are not going to do it. I want to make this further observation, Some hon. Members have spoken as though we alone do not realise the condition of much of our industry to day. I can assure the House that it is the one subject that is with me day and night. I have good reason—good private reasons—for recognising it. My income is about a fifth what it was a few years ago. For three years I have done what I have never done before, I have been living on capital and borrowing. I know there are many men in the country in the same condition—

But that is no reason why our party should break the pledge that we have made. I myself look on this Pensions Bill as one of the most important things that could be undertaken at this moment, because it is the pledge to the country that we, unanimously on this side of the House, are resolved that we are going to do all that we can, even in this most difficult time, and in this time of suffering to struggle for the maintenance, if not the improvement, of the conditions of life among our people, and to show that we have the courage—I know there are others who would call it the foolhardi-ness—to adhere to a programme of this kind when the outlook would cause a great many people to hang back. I know the condition of industry, but, after all, we are seeing to-day what we have never seen before—we are seeing that the people of this country are beginning to realise the great truth that no Government can conduct competitive industry against the world; and for the first time masters and men alike are beginning to realise that co operation is the only form of industry that is going to win through to-day—a lesson slowly learnt, and it will take time to learn it, but it is going to be learned.

I am going to say a word here about the employers of the country. There are a few men yet who have not fully realised what this country is up against, and I appeal to them, as I have before now appealed to labour—I appeal to the employers to put into the pool all the brains that they have got to-day—

all the brains that they have, in order to devise methods of meeting foreign competition by bringing together firms in the worst-hit industries, by scrapping obsolete works, and by concentrating on the best and most modern.

That is so in the largest industries in this country, and with the present condition of the world's trade and the number of orders that can be had in future years, there will not be enough to go round to maintain all the plants we have got, especially as some of them are conducted to-day. I have always said that the whole country has got to learn once more the power of concentrated work. As I have preached to one side on this subject, I have preached to the other this afternoon, that any man going into business to-day is going into the hardest of professions. The man who thinks business is going to be a little work in the week, accompanied by long week-ends, has to learn that that is only leading to the Bankruptcy Court and all connected with it.

The hon. Member for Merthyr (Mr. Wallhead) was speaking about the Super-tax, upon which I will only say a word or two. Figures have been quoted often during this Debate showing the great increase in the number of Super-tax payers implying that there was a far greater increase in the wealth of the country than there has actually been. In these matters it is necessary to retain some sense of proportion. We need to be reminded that when the Super-tax was first imposed, the limit was £5,000 a year, and that the reduction to £3,000 more than doubled the number of payers; the reduction by another £500 raised it by another one-third; the reduction to £2,00C raised it again by more than half. The amount on which it is paid is two-fifths the original amount, and that in itself is sufficient to explain the greatly increased numbers.

One more observation on what the hon. Member for Merthyr said about the gold standard! I think this ought to be said to the House, because often during the Debates of the last two or three weeks this point has been stated.' I know the point the hon. Member for Merthyr raised is one that finds a good deal of acceptance among hon. Members opposite. He said that the return to the gold standard was a fatal thing, or words to that effect, for the shipbuilding and the iron and steel trades. He did not explain why, but I imagine that what was in his mind was the possibility of there being at some time or another, in connection with it, a rise in the Bank rate. I say that because the hon. Member for West Ham (Mr. W. Thorne) one day asked about the rise in the Bank rate. I felt that that could not concern him very much, and that the asking of that question meant some one on the Opposition benches was trying to exploit the situation. There is more nonsense talked about the effect of the Bank rate on the ordinary industry of this country than on almost any subject connected with finance.

Let us first remember this, before we rush to make our deduction on the effect of the Bank rate. In no country in the world that manufactures today is there a lower Bank rate than we enjoy here, except in the United States of America. The right hon. Gentleman the Member for Carnarvon Boroughs said that German competition had never been more dangerous than today, and Germany has conducted that competition on a rate of 12 per cent. Austria is not enjoying such industrial prosperity on a rate in the neighbourhood of 12 per cent., as she did on a rate of 20 per cent. The French rate is higher than ours. The mere height of the Bank rate does not necessarily mean bankruptcy. The most difficult time I ever remember to make a profit in business, was when the Bank rate was 2 per cent, for 2½ years in the early 'nineties. The trade of the ordinary man conducting a business is not affected in the way that many Members of the House have stated to be the case. A rise of 1 per cent. in the Bank rate, carried on for 12 months, means only £1,000 on a £100,000 overdraft, and the man who can afford it, £100,000 overdraft is a man with a pretty large capital and with a very big turnover. Making a profit in industry does not necessarily depend on the height or on the lowness of the Bank rate. The banks themselves do better on a comparatively low rate. They run the risk, the higher the Bank rate gets, of making bad debts, and the greater the risk of bad debts, the greater the risk of making large bad debts.

The one class in this country who cannot stand a high Bank rate is the speculative class, and the Bank rate is the one instrument that exists for breaking rings and trusts. You have the proof of that over and over again where you get commodities like tin, copper, or wheat run up, whether in this country or across the Atlantic, and a rise in the Bank rate is the one thing which brings the speculator down. Last year the rise of only ½ per cent. in the Federal Reserve Bank's rate in America brought down the price of wheat in one month by 40 cents, and put an end to that speculation in Chicago which was felt in every household in this country. Whatever may be said about the gold standard, let us remember that it is the one standard in the world, with reference to money and coinage, that is absolutely knave-proof. That is more than can be said for any other standard in the world.

I apologise for having kept the House so long, but there is one other thing that I should like to say. A good deal has been said about economy. We are going to use every endeavour to effect economies. They get more difficult every year, but we shall do our best this autumn. With regard to that, however, let me say one word to this House of Commons, which is a new one. I apologise to older Members, for they have heard me say it before. No Government can be more economical than the House of Commons. The House of Commons is the penultimate arbiter of economy. The ultimate arbiter is the country—the electors. But in the House of Commons again and again questions come up that look small in themselves—questions with regard to salaries, questions with regard to pensions, questions with regard to Civil Service points—questions involving, perhaps, half a million, a quarter of a million, or, perhaps, a million. Members have great sympathy with the demand, and their constituents have still more, and it is often very difficult for Members in this House to say "No." If we cannot stop these small expenditures, we cannot hope to stop the big. Two or three small expenditures make a big expenditure, and if the House of Commons gives way on a small expenditure, not only does it lead to increased expenditure, but it breaks the heart of any Government that is trying to effect economies. That is what I mean when I say that no Government can be stronger in bringing about economies than the House of Commons will let it be. The House of Commons itself very often has to take its courage in both hands to be able to stand up to its constituents and say, "No, we must take our stand for economy."

Finally, I stand here to-night to support to the utmost of my ability, and with my whole heart, the Budget of my right hon. Friend the Chancellor of the Exchequer. In an extremely difficult time he has had to make bricks without straw, and, having regard to what he has had to distribute, I think he has managed with extraordinary skill to do the best he can. Those who are most disappointed are those who expected to find something in the nature of fireworks. They have not found it, and they are disappointed, because on all the things that matter he has proved exactly what we knew he would, and what the son of his father must be, that is a staunch Conservative economist and a sound financier. I would remind the House, as he has said himself, that you cannot judge the Budget by itself. This Budget has been introduced in conjunction with the Pensions Bill and with the return of the gold standard, and it must be judged by its success in conjunction with these Acts as they will be as a whole. It must be judged in connection with the Budgets that he will bring in, and it will be for the country to decide when file time comes as to what the quality of his financial administration has been, judged by the results over a term of years. I have no doubt that when that time comes, they will endorse the verdict which the House will give tonight to this Budget, and to succeeding Budgets—that they are the work of a man who will leave his name in history as a great Chancellor of the Exchequer.

Several hon. Members having risen—

rose in his place, and claimed to move, "That the Question be now put."

Question put, "That the Question be now put."

The House proceeded to a Division.

(seated and covered):. On a point of Order. May I draw your attention to the words of the Standing Order, and to the fact that only three speakers from a party representing 3,000,000 voters have been permitted to address the House? May I also draw your attention to the fact that the Standing Order lays it down that the Closure shall not be accepted if it be an infringement of the rights of minorities? May I ask whether you can see your way to answer the point which I have raised?

It is disgraceful; it is a scandal. [HON. MEMBERS: "Name!"]

The House divided: Ayes, 334; Noes, 142.

Division No. 116.]

AYES.

[11.45 p.m.

Acland-Troyte, Lieut.-Colonel

Butt, Sir Alfred

Eden, Captain Anthony

Agg-Gardner, Rt. Hon. Sir James T.

Cadogan, Major Hon. Edward

Edmondson, Major A J.

Alexander, E. E. (Leyton)

Campbell, E. T.

Elliot, Captain Walter E.

Alexander, Sir Wm. (Glasgow, Cent'l)

Cassels, J. D.

Elveden, Viscount

Allen, J. Sandeman (L'pool, W. Derby)

Cautley, Sir Henrys.

Erskine, Lord (Somerset, Weston-s.-M.)

Allen, Lieut.-Col. sir William James

Cayzer, Sir C. (Chester, City)

Erskine, James Malcolm Monteith

Amery, Rt. Hon. Leopold C. M. S.

Cayzer, Maj. Sir Herbt. R.(Prtsmth. S.)

Everard, W. Lindsay

Applin, Colonel R. V. K.

Cazalet, Captain Victor A.

Fairfax, Captain J. G.

Ashley, Lt.-Col. Rt. Hon. Wilfrid W.

Cecil, Rt. Hon. Sir Evelyn (Aston)

Falle, Sir Bertram G.

Ashmead-Bartlett, E.

Cecil, Rt. Hon. Lord H. (Ox. Univ.)

Falls, Sir Charles F.

Astbury, Lieut.-Commander, F. W.

Chadwick, Sir Robert Burton

Fanshawe, Commander G. D.

Astor, Maj. Hon. John J.(Kent, Dover)

Chamberlain, Rt. Hon. N. (Ladywood)

Fermoy, Lord

Atkinson, C.

Chapman, Sir S.

Fielden, E. B.

Baldwin Rt. Hon. Stanley

Charteris, Brigadier-General J.

Finburgh, S.

Balfour, George (Hampstead)

Chilcott, Sir Warden

Ford, P. J.

Balniel, Lord

Christie, J. A

Forestier-Walker, L.

Barclay-Harvey, C. M.

Churchill, Rt. Hon. Winston Spencer

Foster, Sir Harry S.

Barnett, Major Richard W.

Churchman, Sir Arthur C.

Foxcroft, Captain C. T.

Barnston, Major Sir Harry

Clarry, Reginald George

Fraser, Captain Ian

Beamish, Captain T. P. H.

Clayton, G. C.

Fremantle, Lieut. Colonel Francis E.

Beckett, Sir Gervase (Leeds, N.)

Cobb, Sir Cyril

Gadie, Lieut.-Col. Anthony

Bellairs, Commander Carlyon W.

Cochrane, Commander Hon. A. D.

Ganzoni, Sir John

Bennett, A. J.

Cockerill, Brigadier-General G. K.

Gates, Percy

Berry, Sir George

Cohen, Major J. Brunel

Gault, Lieut.-Col. Andrew Hamilton

Birchall, Major J. Dearman

Colfox, Major Wm. Phillips

Gee, Captain R.

Bird, E. R. (Yorks, W. R., Skipton)

Cooper, A. Duff

Glyn, Major R. G. C.

Bird, Sir R. B. (Wolverhampton, W.)

Cope, Major William

Goff, Sir Park

Blades, Sir George Rowland

Courtauld, Major J. S.

Gower, Sir Robert

Blundell, F. N.

Courthope, Lieut.-Col. George L.

Grace, John

Boothby, R. J. G.

Cowan, Sir Wm. Henry (Islingtn. N.)

Greene, W. P. Crawford

Bourne, Captain Robert Croft

Craig, Capt. Rt. Hon. C. C. (Antrim)

Greenwood, William (Stockport)

Bowater, Sir T. Vansittart

Craig, Ernest (Chester, Crewe)

Grenfell, Edward C. (City of London)

Bowyer, Captain G. E. W.

Croft, Brigadier-General Sir H.

Grotrian, H. Brent

Boyd-Carpenter, Major A.

Crooke, J. Smedley (Deritend)

Guest, Capt. Rt. Hon. F. E. (Bristol, N.)

Brass, Captain W.

Crookshank, Col. C. de W. (Berwick)

Guinness, Rt. Hon. Walter E.

Bridgeman, Rt. Hon William Clive

Crookshank, Cpt. H .(Lindsey, Gainsbro)

Gunston, Captain D. W.

Briggs, J. Harold

Curtis-Bennett, Sir Henry

Hacking, Captain Douglas H.

Briscoe, Richard George

Curzon, Captain Viscount

Hall, Capt. W. D'A. (Brecon & Rad.)

Brittain, Sir Harry

Dalkeith, Earl of

Hammersley, S. S.

Brocklebank, C. E. R.

Dalziel, Sir Davison

Hanbury, C.

Brooke, Brigadier-General C. R.I.

Davidson, J. (Hertf'd, Hemel Hempst'd)

Harland, A.

Broun-Lindsay, Major H.

Davidson, Major-General Sir John H.

Harrison, G. J. C.

Brown, Maj. D. C. (N'th'l'd., Hexham)

Davies, A. V. (Lancaster, Royton)

Hartington, Marquess of

Brown, Brig.-Gen. H. C. (Berks, Newb'y)

Davies, Maj. Geo. F. (Somerset, Yeovil)

Harvey, G. (Lambeth, Kennington)

Buckingham, Sir H.

Davies, Sir Thomas (Cirencester)

Harvey, Major S. E. (Devon, Totnes)

Bull, Rt. Hon. Sir William James

Davison, Sir W. H. (Kensington, S.)

Haslam, Henry C.

Bullock, Captain M.

Dean, Arthur Wellesley

Hawke, John Anthony

Burgoyne, Lieut.-Colonel Sir Alan

Dixey, A. C.

Headlam, Lieut.-Colonel C. M.

Burman, J. B.

Doyle, Sir N. Grattan

Henderson, Capt. R. R. (Oxf'd, Henley)

Butler, Sir Geoffrey

Drewe, C.

Henderson, Lieut.-Col. V. L. (Bootle)

Heneage, Lieut.-Col. Arthur P.

Mason, Lieut.-Col. Glyn K.

Shaw, R. G. (Yorks, W. R., Sowerby)

Henn, Sir Sydney, H.

Merriman, F. B.

Shaw, Lt.-Col. A. D. Mcl. (Renfrew, W)

Hennessy, Major J. R. G.

Meyer, Sir Frank

Shaw, Capt. W. W. (Wilts, Westb'y)

Henniker-Hughan, Vice-Adm. Sir A.

Milne, J. S. Wardlaw

Sheffield, Sir Berkeley

Herbert, S. (York, N. R., Scar. & Wh'by)

Mitchell, W. Foot (Saffron Walden)

Shepperson, E. W.

Hilton, Cecil

Mitchell, Sir W. Lane (Streatham)

Sinclair, Col. T. (Queen's Univ., Belfst.)

Hoare, Lt.-Col. Rt. Hon. Sir S. J. G.

Moore, Sir Newton J.

Skelton, A. N.

Hogg. Rt. Hon. Sir D. (St. Marylebone)

Moore-Brabazon, Lieut.-Col. J. T. C.

Slaney, Major P. Kenyon

Hohler, Sir Gerald Fitzroy

Moreing, Captain A. H.

Smith, R. W. (Aberd'n & Kinc'dine, C.)

Holbrook, Sir Arthur Richard

Morrison, H. (Wilts, Salisbury)

Smith-Carington, Neville W.

Holt, Capt. H. P.

Morrison-Bell, Sir Arthur Clive

Smithers, Waldron

Hope, Capt. A. O. J. (Warw'k, Nun.)

Murchison, C. K.

Somerville, A. A. (Windsor)

Hopkins, J. W. W.

Nall, Lieut.-Colonel Sir Joseph

Spender Clay, Colonel H.

Hopkinson, A. (Lancaster, Mossley)

Neville, R. J.

Sprot, Sir Alexander

Howard, Captain Hon. Donald

Newman, Sir R. H. S. D. L. (Exeter)

Stanley, Col. Hon. G. F.(Will'sden, E.)

Hudson, Capt. A. U. M. (Hackney, N.)

Newton, Sir D. G. C. (Cambridge)

Stanley, Lord (Fylde)

Hudson, R.S. (Cumberl'nd, Whiteh'n)

Nicholson, O. (Westminster)

Stanley, Hon. O. F. G. (Westm'eland)

Hume, Sir G. H.

Nicholson, William G. (Petersfield)

Steel, Major Samuel Strang

Hunter-Weston, Lt.-Gen. Sir Aylmer

Nield, Rt. Hon. Sir Herbert

Storry Deans, R.

Huntingfield, Lord

Nuttall, Ellis

Stott, Lieut.-Colonel W. H.

Hurd, Percy A.

Oakley, T.

Strickland, Sir Gerald

Hutchison, G. A. Clark (Midl'n & P'bl's)

O'Connor, T. J. (Bedford, Luton)

Stuart, Crichton-, Lord C.

Iliffe, Sir Edward M.

Oman, Sir Charles William C.

Stuart, Hon. J. (Moray and Nairn)

Inskip, Sir Thomas Walker H.

Ormsby-Gore, Hon. William

Styles, Captain H. Walter

Jackson, Lieut.-Colonel Hon. F. S.

Pennefather, Sir John

Sueter, Rear-Admiral Murray Fraser

Jacob, A. E.

Penny, Frederick George

Sugden, Sir Wilfrid

Jephcott, A. R.

Percy, Lord Eustace (Hastings)

Sykes, Major-Gen. Sir Frederick H.

Jones, G. W. H. (Stoke Newington)

Perkins, Colonel E. K.

Tasker, Major R. Inigo

Kennedy, A. R. (Preston).

Perring, William George

Templeton, W. P.

Kidd, J. (Linlithgow)

Peto, Basil E. (Devon, Barnstaple)

Thompson, Luke (Sunderland)

King, Captain Henry Douglas

Peto, G. (Somerset, Frome)

Thomson, F. C. (Aberdeen, South)

Kinloch-Cooke, Sir Clement

Philipson, Mabel

Thomson, Sir W. Mitchell- (Croydon, S.)

Knox, Sir Alfred

Pielou, D. P.

Tryon, Rt. Hon. George Clement

Lamb, J. Q.

Pilcher, G.

Vaughan-Morgan, Col. K. P.

Lane-Fox, Lieut.-Col. George R.

Power, Sir John Cecil

Waddington, R.

Leigh, Sir John (Clapham)

Pownall, Lieut.-Colonel Assheton

Wallace, Captain D. E.

Lister, Cunliffe-, Rt. Hon. Sir Philip

Preston, William

Ward, Lt.-Col. A. L. (Kingston-on-Hull)

Little, Dr. E. Graham

Price, Major C. W. M.

Warner, Brigadier-General W. W.

Lloyd, Cyril E. (Dudley)

Radford, E. A.

Warrender, Sir Victor

Locker-Lampson, Com. O. (Handsw'th)

Ramsden, E.

Waterhouse, Captain Charles

Loder, J. de V.

Rawson, Alfred Cooper

Watts, Dr. T.

Looker, Herbert William

Rees, Sir Beddoe

Wells, S. R.

Lord, Walter Greaves-

Reid, Capt. A. S. C. (Warrington)

Wheler, Major Granville C. H.

Lucas-Tooth, Sir Hugh Vere

Reid D. D (County Down)

Williams, Com. C. (Devon, Torquay)

Luce, Major-Gen. Sir Richard Harman

Remer, J. R.

Williams, Herbert G. (Reading)

Lumley, L. R.

Remnant, Sir James

Wilson, Sir C. H. (Leeds, Central)

Lynn, Sir R. J.

Rhys, Hon. C. A. U.

Winby, Colonel L. P.

MacAndrew, Charles Glen

Rice, Sir Frederick

Windsor-Clive, Lieut.-Colonel George

Macdonald, Capt. P. D. (I. of W.)

Roberts, Samuel (Hereford, Hereford)

Winterton, Rt. Hon. Earl

Macdonald, R. (Glasgow, Cathcart)

Robinson, Sir T. (Lancs., Stretford)

Wise, Sir Fredric

McDonnell, Colonel Hon. Angus

Ropner, Major L.

Wolmer, Viscount

MacIntyre, Ian

Ruggles-Brise, Major E. A.

Womersley, W. J.

McLean, Major A.

Russell, Alexander West (Tynemouth)

Wood, B. C. (Somerset, Bridgwater)

Macmillan, Captain H.

Rye, F. G.

Wood, Rt. Hon. E. (York, W.R., Ripon)

Macnaghten, Hon. Sir Malcolm

Salmon, Major I.

Wood, E. (Chest'r. Stalyb'dge & Hyde)

McNeill, Rt. Hon. Ronald John

Samuel, A. M. (Surrey, Farnham)

Wood, Sir Kingsley (Woolwich, W.)

Macquisten, F. A.

Samuel, Samuel (W'dsworth, Putney)

Worthington-Evans, Rt. Hon. Sir L.

Maitland, Sir Arthur D. Steel-

Sandeman, A. Stewart

Yerburgh, Major Robert D. T.

Makins, Brigadier-General E.

Sanders, Sir Robert A.

Malone, Major P. B.

Sandon, Lord

TELLERS FOR THE AYES.—

Manningham-Buller, Sir Mervyn

Sassoon, Sir Philip Albert Gustave D.

Commander B. Eyres Monsell and Colonel Gibbs.

Margesson, Captain D.

Savery, S. S.

Marriott, Sir J. A. R.

Scott, Sir Leslie (Liverp'l, Exchange)

NOES.

Adamson, Rt. Hon. W. (Fife, West)

Cove, W. G.

Griffiths, T. (Monmouth, Pontypool)

Adamson, W. M. (Staff., Cannock)

Cowan, D. M. (Scottish Universities)

Grundy, T. W.

Ammon, Charles George

Crawfurd, H. E.

Guest, J. (York, Hemsworth)

Attlee, Clement Richard

Dalton, Hugh

Guest, Dr. L. Haden (Southwark, N.)

Barker, G. (Monmouth, Abertillery)

Davies, Evan (Ebbw Vale)

Hall, F. (York, W. R., Normanton)

Barnes, A.

Davies, Rhys John (Westhoughton)

Hall, G. H. (Merthyr Tydvil)

Beckett, John (Gateshead)

Day, Colonel Harry

Hamilton, Sir R. (Orkney & Shetland)

Benn, Captain Wedgwood (Leith)

Dennison, R.

Hardie, George D.

Bowerman, Rt. Hon. Charles W.

Dunnico, H.

Harris, Percy A.

Broad, F. A.

Edwards, C. (Monmouth, Bedwellty)

Hartshorn, Rt. Hon. Vernon

Bromley, J.

Fenby, T. D.

Hastings, Sir Patrick

Buchanan, G.

Garro-Jones, Captain G. M.

Hayes, John Henry

Cape, Thomas

Gibbins, Joseph

Henderson, Rt. Hon. A. (Burnley)

Charleton, H. C.

Gillett, George M.

Henderson, T. (Glasgow)

Clowes, S.

Gosling, Harry

Hirst, G. H.

Cluse, W. S.

Graham, D. M. (Lanark, Hamilton)

Hirst, W. (Bradford, South)

Compton, Joseph

Greenall, T.

Hore-Belisha, Leslie

Connolly, M.

Grenfell. D. R. (Glamorgan)

Hudson, J. H. (Huddersfield)

John, William (Rhondda, West)

Palin, John Henry

Sutton, J. E.

Johnston, Thomas (Dundee)

Paling, W.

Taylor, R. A.

Jones, Henry Haydn (Merioneth)

Parkinson, John Allen (Wigan)

Thomas, Rt. Hon. James H. (Derby)

Jones, J. J. (West Ham, Silvertown)

Pethick-Lawrence, F. W.

Thomas, Sir Robert John (Anglesey)

Jones, Morgan (Caerphilly)

Ponsonby, Arthur

Thomson, Trevelyan (Middlesbro. W.)

Kelly, W. T.

Potts, John S.

Thorne, G. R. (Wolverhampton, E.)

Kennedy, T.

Richardson, R. (Houghton-le-Spring)

Thurtle, E.

Kenworthy, Lt.-Com. Hon. Joseph M.

Riley, Ben

Tinker, John Joseph

Lansbury, George

Roberts, Rt. Hon. F. O.(W. Bromwich)

Varley, Frank B.

Lawson, John James

Robinson, W. C. (Yorks, W.R., Elland)

Viant, S. P.

Lee, F.

Rose, Frank H.

Walsh, Rt. Hon. Steven

Lindley, F. W.

Runciman, Rt. Hon. Walter

Warne, G. H.

Livingstone, A. M.

Saklatvala, Shapurji

Watson, W. M. (Dunfermline)

Lowth, T.

Salter, Dr. Alfred

Watts-Morgan, Lt.-Col. D. (Rhondda)

Lunn, William

Scrymgeour, E.

Webb, Rt. Hon. Sidney

MacDonald, Rt. Hon. J. R.(Aberavon)

Scurr, John

Welsh, J. C.

Mackinder, w.

Shaw, Rt. Hon. Thomas (Preston)

Whiteley, W.

MacLaren, Andrew

Shiels, Dr. Drummond

Wignall, James

Maclean, Nell (Glasgow, Govan)

Simon, Rt. Hon. Sir John

Williams, David (Swansea, E)

Macpherson, Rt. Hon. James I.

Sinclair, Major Sir A. (Caithness)

Williams, Dr. J. H. (Llanelly)

March, S.

Slesser, Sir Henry H.

Williams, T. (York, Don Valley)

Maxton, James

Smillie, Robert

Wilson, c. H. (Sheffield, Attercliffe)

Mond, Rt. Hon. Sir Alfred

Smith, Ben (Bermondsey, Rotherhithe)

Wilson, R. J. (Jarrow)

Montague, Frederick

Smith, H. B. Lees (Keighley)

Windsor, Walter

Morris, R. H.

Smith, Rennie (Penistone)

Wright, W.

Morrison, R. C. (Tottenham, N.)

Snell, Harry

Young, E. Hilton (Norwich)

Murnin, H.

Snowden, Rt. Hon. Philip

Young, Robert (Lancaster, Newton)

Naylor, T. E.

Spencer, George A. (Broxtowe)

Oliver, George Harold

Stamford, T. W.

TELLERS FOR THE NOES.—

Owen, Major G.

Stephen, Campbell

Sir Godfrey Collins and Sir Robert

Hutchison.

Question put accordingly, "That the words proposed to be left out stand part of the Question."

Division No. 117.]

AYES.

[12.0 m.

Acland-Troyte, Lieut.-Colonel

Burgoyne, Lieut.-Colonel Sir Alan

Davies, A. V. (Lancaster, Royton)

Agg-Gardner, Rt. Hon. Sir James T.

Burman, J. B.

Davies, Maj. Geo. F. (Somerset, Yeovil)

Alexander, E. E. (Leyton)

Butler, Sir Geoffrey

Davies, Sir Thomas (Cirencester)

Alexander, Sir Wm. (Glasgow, Cent'l)

Butt, Sir Alfred

Davison, Sir W. H. (Kensington, S.)

Allen, J. Sandeman (L'pool. W. Derby)

Cadogan, Major Hon. Edward

Dean, Arthur Wellesley

Allen, Lieut.-Col. Sir William James

Campbell, E. T.

Dixey, A. C.

Amery, Rt. Hon. Leopold C. M. S.

Cassels, J. D.

Doyle, Sir N. Grattan

Applin, Colonel R. V. K.

Cautley, Sir Henry S.

Drewe, C.

Ashley, Lt.-Col. Rt. Hon. Wilfrid W.

Cayzer, sir C. (Chester, City)

Eden, Captain Anthony

Ashmead-Bartlett, E.

Cayzer, Maj. Sir Herbt. R. (Prtsmth. S.)

Edmondson, Major A. J.

Astbury, Lieut.-Commander F. W.

Cazalet, Captain Victor A.

Elliot, Captain Walter E.

Astor, Maj. Hn. John J. (Kent, Dover)

Cecil, Rt. Hon. Sir Evelyn (Aston)

Elveden, Viscount

Atkinson, C.

Cecil, Rt. Hon. Lord H. (Ox. Univ.)

Erskine, Lord (Somerset, Weston-s.-M.)

Baldwin, Rt. Hon. Stanley

Chadwick, Sir Robert Burton

Erskine, James Malcolm Monteith

Balfour, George (Hampstead)

Chamberlain, Rt. Hon. N. (Ladywood)

Everard, W. Lindsay

Balniel, Lord

Chapman, Sir S.

Fairfax, Captain J. G.

Barclay-Harvey, C. M.

Charteris, Brigadier-General J.

Falle, Sir Bertram G.

Barnett, Major Richard W.

Chilcott, Sir Warden

Falls, Sir Charles F.

Barnston, Major Sir Harry

Christie, J. A.

Fanshawe, Commander G. D.

Beamish, Captain T. P. H.

Churchill, Rt. Hon. Winston Spencer

Fermoy, Lord

Beckett, Sir Gervase (Leeds, N.)

Churchman, Sir Arthur C.

Fielden, E. B.

Bellairs, Commander Carlyon W.

Clarry, Reginald George

Finburgh, S.

Bennett, A. J.

Clayton, G. C.

Ford, P. J.

Berry, Sir George

Cobb, Sir Cyril

Forestier-Walker, L.

Birchall, Major J. Dearman

Cochrane, Commander Hon. A. D.

Foster, Sir Harry S.

Bird, E. R. (Yorks, W. R., Skipton)

Cockerill, Brigadier-General G. K.

Foxcroft, Captain C. T.

Bird, Sir R. B. (Wolverhampton, W.)

Cohen, Major J. Brunei

Fraser, Captain Ian

Blades, Sir George Rowland

Colfox, Major Wm. Phillips

Fremantle, Lt.-Col. Francis E.

Blundell, F. N.

Cooper, A. Duff

Gadie, Lieut.-Col. Anthony

Bourne, Captain Robert Croft

Cope, Major William

Ganzoni, Sir John

Bowater, Sir T. Vansittart

Courtauld, Major J. S.

Gates, Percy

Bowyer, Captain G. E. W.

Courthope, Lieut.-Col. George L.

Gault, Lieut.-Col. Andrew Hamilton

Boyd-Carpenter, Major A.

Cowan, Sir Wm. Henry (Islington, N.)

Gee, Captain R.

Brass, Captain W.

Craig, Capt. Rt. Hon. C. C. (Antrim)

Glyn, Major R. G. C.

Bridgeman, Rt. Hon. William Clive

Craig, Ernest (Chester, Crewe)

Goff, Sir Park

Briscoe, Richard George

Croft, Brigadier-General Sir H.

Gower, Sir Robert

Brittain, Sir Harry

Crooke, J. Smedley (Deritend)

Grace, John

Brocklebank, C. E. R.

Crookshank, Col. C. de W. (Berwick)

Greene, W. P. Crawford

Brooke, Brigadier-General C. R. I.

Crookshank, Cpt. H.(Lindsey, Gainsbro)

Greenwood, William (Stockport)

Broun-Lindsay, Major H.

Curtis-Bennett, Sir Henry

Grenfell, Edward C. (City of London)

Brown, Maj. D. C. (N'th'l'd., Hexham)

Curzon, Captain Viscount

Grotrian, H. Brent

Brown, Brig.-Gen. H. C.(Berks, Newb'y)

Dalkeith, Earl of

Guest, Capt. Rt. Hon. F. E. (Bristol, N.)

Buckingham, Sir H.

Dalziel, Sir Davison

Guinness, Rt. Hon. Walter E.

Bull, Rt. Hon. Sir William James

Davidson, J.(Hertf'd, Hemel Hempst'd)

Gunston, Captain D. W.

Bullock, Captain M.

Davidson, Major-General Sir John H.

Hacking, Captain Douglas H.

The House divided: Ayes, 331; Noes, 139.

Hall, Capt. W. D'A. (Brecon & Rad.)

Macmillan Captain H.

Sanders, Sir Robert A.

Hammersley, S. S.

Macnaghten, Hon. Sir Malcolm

Sandon, Lord

Hanbury, C.

McNeill, Rt. Hon. Ronald John

Sassoon, Sir Philip Albert Gustave D.

Harland, A.

Macquisten, F. A.

Savery, S. S.

Harrison, G. J. C.

Maitland, Sir Arthur D. Steel-

Scott, Sir Leslie (Liverp'l, Exchange)

Hartington, Marquess of

Makins, Brigadier-General E.

Shaw, R. G. (Yorks, W. R., Sowerby)

Harvey, G. (Lambeth, Kennington)

Malone, Major P. B.

Shaw, Lt.-Col. A. D. Mcl. (Renfrew, W)

Harvey, Major S. E. (Devon, Totnes)

Manningham-Buller, Sir Mervyn

Shaw, Capt. W. W. (Wilts, Westb'y)

Haslam, Henry C.

Margesson, Captain D.

Sheffield, Sir Berkeley

Hawke, John Anthony

Marriott, Sir J. A. R.

Shepperson, E. W.

Headlam, Lieut.-Colonel C. M.

Mason, Lieut.-Col. Glyn K.

Sinclair, Col. T. (Queen's Univ., Belfst)

Henderson, Capt. R. R. (Oxfd, Henley)

Merriman, F. B.

Skelton, A. N.

Henderson, Lieut.-Col. V. L. (Bootle)

Meyer, Sir Frank

Slaney, Major P. Kenyon

Heneage, Lieut.-Col. Arthur P.

Milne, J. S. Wardlaw-

Smith, R. W. (Aberd'n & Kinc'dine, C.)

Henn, Sir Sydney H.

Mitchell, W. Foot (Saffron Walden)

Smith-Carington, Neville W.

Hennessy, Major J. R. G.

Mitchell, Sir W. Lane (Streatham)

Smithers, Waldron

Henniker-Hughan, Vice-Adm. Sir A.

Moore, Sir Newton J.

Somerville, A. A. (Windsor)

Herbert, S. (York, N. R., Scar. & Wh'by)

Moore-Brabazon, Lieut.-Col. J. T. C.

Spender Clay, Colonel H.

Hilton, Cecil

Moreing, Captain A. H.

Sprot, Sir Alexander

Hoare, Lt.-Col. Rt. Hon. Sir S J. G.

Morrison, H. (Wilts, Salisbury)

Stanley, Col. Hon. G. F.(Will'sden, E)

Hogg, Rt. Hon. Sir D. (St. Marylebone)

Morrison-Bell, Sir Arthur Clive

Stanley, Lord (Fylde)

Hohler, Sir Gerald Fitzroy

Murchison, C. K.

Stanley, Hon. O. F. G.(Westm'eland)

Holbrook, Sir Arthur Richard

Nall, Lieut.-Colonel Sir Joseph

Steel, Major Samuel Strang

Holt, Capt. H. P.

Neville R. J.

Storry Deans, R.

Hope, Capt. A. O. J. (Warw'k, Nun.)

Newman, Sir R. H. S. D. L. (Exeter)

Stott, Lieut.-Colonel W. H.

Hopkins, J. W. W.

Newton, Sir D. G C. (Cambridge)

Strickland, Sir Gerald.

Hopkinson, A. (Lancaster, Mossley)

Nicholson, O. (Westminster)

Stuart, Crichton-, Lord C

Horne, Rt. Hon. Sir Robert S.

Nicholson, William G. (Petersfield)

Stuart, Hon. J. (Moray and Nairn)

Howard, Captain Hon. Donald

Nield, Rt. Hon. Sir Herbert

Styles, Captain H. Walter

Hudson, Capt. A. U.M. (Hackney, N.)

Nuttall, Ellis

Sueter, Rear-Admiral Murray Fraser

Hudson, R. S. (Cumberl'nd, Whiteh'n)

Oakley, T.

Sugden, Sir Wilfrid

Hume, Sir G. H.

O'Connor, T. J. (Bedford, Luton)

Sykes, Major-Gen. Sir Frederick H.

Hunter-Weston, Lt.-Gen. Sir Aylmer

Oman, Sir Charles William C.

Tasker, Major R. Inigo

Huntingfield, Lord

Ormsby-Gore, Hon. William

Templeton, W. P.

Hurd, Percy A.

Pennefather, Sir John

Thompson, Luke (Sunderland)

Hutchison. G. A. Clark (Midl'n & P'bl's)

Penny, Frederick George

Thomson, F. C. (Aberdeen South)

Iliffe, Sir Edward M.

Percy, Lord Eustace (Hastings)

Thomson, Sir W. Mitchell- (Croydon, S.)

Inskip, Sir Thomas Walker H.

Perkins, Colonel E. K.

Tryon, Rt. Hon. George Clement

Jackson, Lieut.-Colonel Hon. F. S.

Perring, William George

Vaughan-Morgan, Col. K. P.

Jacob, A. E.

Peto, Basil E. (Devon, Barnstaple)

Waddington, R.

Jephcott, A. R.

Peto, G. (Somerset, Frome)

Wallace, Caption D. E.

Jones, G. W. H. (Stoke Newington)

Philipson, Mabel

Ward, Lt.-Col. A. L.(Kingston-on-Hull)

Kennedy, A. R. (Preston)

Pielou, D. P.

Warner, Brigadier-General W. W.

Kidd, J. (Linlithgow)

Pilcher, G.

Warrender, Sir Victor

King, Captain Henry Douglas

Power, Sir John Cecil

Waterhouse, Captain Charles

Kinloch-Cooke, Sir Clement

Pownall, Lieut.-Colonel Assheton

Wells, S. R.

Knox, Sir Alfred

Preston William

Wheler, Major Granville C. H.

Lamb, J. Q.

Price, Major C. W. M.

Williams, Com. C. (Devon, Torquay)

Lane-Fox, Lieut.-Col. George R.

Radford, E. A.

Williams, Herbert G. (Reading)

Leigh, Sir John (Clapham)

Ramsden, E

Wilson, Sir C. H. (Leeds, Central)

Lister, Cunliffe-, Rt. Hon. Sir Philip

Rawson, Alfred Cooper

Winby, Colonel L. P.

Little, Dr. E. Graham

Rees, Sir Beddoe

Windsor-Clive, Lieut.-Colonel George

Lloyd, Cyril E. (Dudley)

Reid, Capt. A. S. C. (Warrington)

Winterton, Rt. Hon. Earl

Locker-Lampson, Com. O. (Handsw'th)

Reid, D. D (County Down)

Wise, Sir Fredric

Loder, J. de V.

Remer, J. R.

Wolmer, Viscount

Looker, Herbert William

Remnant, Sir James

Womersley, W. J.

Lord, Walter Greaves-

Rhys, Hon. C. A. U.

Wood, B. C.(Somerset, Bridgwater)

Lucas-Tooth, Sir Hugh Vere

Rice, Sir Frederick

Wood, Rt. Hon. E. (York, W. R., Ripon)

Luce, Major-Gen. Sir Richard Harman

Roberts, Samuel (Hereford, Hereford)

Wood, E.(Chest'r. Stalyb'dge & Hyde)

Lumley, L. R.

Ropner, Major L.

Wood, Sir Kingsley (Woolwich, W.).

Lynn, Sir R. J.

Ruggles-Brise, Major E. A.

Worthington-Evans, Rt. Hon. Sir L.

MacAndrew, Charles Glen

Russell, Alexander West (Tynemouth)

Yerburgh, Major Robert D. T.

Macdonald, Capt. P. D. (I. of W.)

Rye, F. G.

Macdonald, R. (Glasgow, Cathcart)

Salmon, Major I.

TELLERS FOR THE AYES.—

McDonnell, Colonel Hon. Angus

Samuel, A. M. (Surrey, Farnham)

Commander B. Eyres Monsell and Colonel Gibbs.

Macintyre, Ian

Samuel, Samuel (W'dsworth, Putney)

McLean, Major A.

Sandeman, A. Stewart

NOES.

Adamson, Rt. Hon. W. (Fife, West)

Charleton, H. C.

Dunnico, H.

Adamson, W. M. (Staff., Cannock)

Clowes, S.

Edwards, C. (Monmouth, Bedwellty)

Alexander, A. V. (Sheffield, Hillsbro')

Cluse, W. S.

Fenby, T. D.

Ammon, Charles George

Collins, Sir Godfrey (Greenock)

Garro-Jones, Captain G. M.

Attlee, Clement Richard

Compton, Joseph

Gibbins, Joseph

Barker, G. (Monmouth, Abertillery)

Connolly, M.

Gillett, George M.

Barnes, A.

Cove, W. G.

Gosling, Harry

Beckett, John (Gateshead)

Cowan, D. M. (Scottish Universities)

Graham, D. M. (Lanark, Hamilton)

Benn, Captain Wedgwood (Leith)

Crawfurd, H. E.

Greenall, T.

Bowerman, Rt. Hon. Charles W.

Dalton, Hugh

Grenfell, D. R. (Glamorgan)

Broad, F. A.

Davies, Evan (Ebbw Vale)

Griffiths, T. (Monmouth, Pontypool)

Bromley, J.

Davies, Rhys John (Westhoughton)

Grundy, T. W.

Buchanan, G.

Day, Colonel Harry

Guest, J. (York, Hemsworth)

Cape, Thomas

Dennison, R.

Guest, Dr. L. Haden (Southwark, N.)

Hall, F. (York, W.R., Normanton)

Maxton, James

Smith, Rennie (Penistone)

Hall, G. H. (Merthyr Tydvil)

Mond, Rt. Hon. Sir Alfred

Snell, Harry

Hamilton, Sir R. (Orkney & Shetland)

Montague, Frederick

Spencer, George A. (Broxtowe)

Hardie, George D.

Morris, R. H.

Stamford, T. W.

Harris, Percy A.

Morrison, R. C. (Tottenham, N.)

Stephen, Campbell

Hartshorn, Rt. Hon. Vernon

Murnin, H.

Sutton, J. E.

Hastings, Sir Patrick

Naylor, T. E.

Taylor, R. A.

Hayes, John Henry

Oliver, George Harold

Thomas, Rt. Hon. James H. (Derby)

Henderson, Rt. Hon. A. (Burnley)

Owen, Major G.

Thomas, Sir Robert John (Anglesey)

Henderson, T. (Glasgow)

Palin, John Henry

Thomson, Trevelyan (Middlesbro. W.)

Hirst, G. H.

Paling, W.

Thorne, G. R. (Wolverhampton, E.)

Hirst, W. (Bradford, South)

Parkinson, John Allen (Wigan)

Thurtle, E.

Hore-Belisha, Leslie

Pethick-Lawrence, F. W.

Tinker, John Joseph

Hudson, J. H. Huddersfield

Ponsonby, Arthur

Varley, Frank B.

Hutchison, Sir Robert (Montrose)

Potts, John S.

Viant, S. P.

John, William (Rhondda, West)

Richardson, R. (Houghton-le-Spring)

Walsh, Rt. Hon. Steven

Johnston, Thomas (Dundee)

Riley, Ben

Watson, W. M. (Dunfermline)

Jones, Henry Haydn (Merioneth)

Roberts, Rt. Hon. F. O.(W. Bromwich)

Watts-Morgan, Lt.-Col. D. (Rhondda)

Jones, J. J. (West Ham, Silvertown)

Robinson, W. C. (Yorks. W. R., Elland)

Webb, Rt. Hon. Sidney

Jones, Morgan (Caerphilly)

Rose, Frank H.

Welsh, J. C.

Kelly, W. T.

Runciman, Rt. Hon. Walter

Whiteley, W.

Kenworthy, Lt.-Com. Hon. Joseph M.

Saklatvala, Shapurji

Wignall, James

Lansbury, George

Salter, Dr. Alfred

Williams, David (Swansea, E.)

Lawson, John James

Scrymgeour, E.

Williams, Dr. J. H. (Llanelly)

Lee, F.

Scurr, John

Williams, T. (York, Don Valley)

Lindley, F. W.

Shaw, Rt. Hon. Thomas (Preston)

Wilson, C. H. (Sheffield, Attercliffe)

Livingstone, A. M.

Shiels, Dr. Drummond

Wilson, R. J. (Jarrow)

Lunn, William

Simon, Rt. Hon. Sir John

Windsor, Walter

MacDonald, Rt. Hon. J. R.(Aberavon)

Sinclair, Major Sir A. (Caithness)

Wright, W.

Mackinder, W.

Slesser, Sir Henry H.

Young, Robert (Lancaster, Newton)

MacLaren, Andrew

Smillie, Robert

Maclean, Nell (Glasgow, Govan)

Smith, Ben (Bermondsey, Rotherhithe)

TELLERS FOR THE NOES.—

Macpherson, Rt. Hon. James I.

Smith, H. B. Lees (Keighley)

Mr. T. Kennedy and Mr. Warne.

Bill read a Second time.

Bill committed to a Committee of the Whole House for Thursday.

Wireless Telegraphy and Signalling Bill

Order for Second Reading read, and discharged; Bill withdrawn.

Rating of Machinery Bill

Order for Second Reading read, and discharged; Bill withdrawn.

Mental Deficiency (Amendment) Bill

Considered in Committee, and reported, without Amendment; read the Third time, and passed.

Interpretation Measure, 1924

I beg to move,

"That, in accordance with the Church of England Assembly (Powers) Act, 1919, this House do direct that the Interpretation Measure, 1924, be presented to His Majesty for Royal Assent."

This is a formal matter, and I hope the House will agree to the Motion. It is to apply the Interpretation Act, 1889, to the drafting of Church Measures, with some supplementary definitions, and to decide certain ambiguities. It is purely formal, but it is important to pass it, because the drafting of other Measures depends upon it.

Question put, and agreed to.

The remaining Orders were read, and postponed.

It being after Half-past Eleven of the Clock, Mr. SPEAKER adjourned the House, without Question put, pursuant to the Standing Order.

Adjourned at Eighteen Minutes after Twelve o'Clock.